There’s no denying the capital markets meltdown happening due to the Coronavirus. 


As I wrote about in my last blog post, one possible impact will be more hesitant buyers. More inventory means better selection and more buyer leverage in negotiations in the 2Q and 3Q of this year. The counterbalancing impact will be lower rates, but this is more impactful for buyers who are rate sensitive (i.e. focused on monthly payments). Luxury home buyers are typically not rate sensitive, but they do keep a close watch on their portfolio values. 


If you want to ZIG when others ZAG, you need confidence. You need a deep understanding of the market. Let’s leave the Coronavirus analysis for the epidemiologists and focus on what we do best: analyze Boulder real estate. 

This week, I’m going to focus on three strikingly similar luxury home sales and then take an analytical look at the market segment they represent: new construction, valued at $2M or more in the City of Boulder. 


Notable Sales | $2M+, City of Boulder, Newish Construction

3074 15th Street | $2.57M

A four bedroom, five bath, ~5,000 SQFT home in north central Boulder. It finally sold after being on the market for 237 days. 


The deal closed at a sale price of $2.6M or $516/SF (no disclosed concessions). Talk to local architects and they’ll tell you that the starting point for basic new construction is now over $400/SF. Given the lot size, turn-key nature, and location, it was a good value for the new owner. 



The property is situated on a half acre, south facing flag lot. 15th street also dead ends, so there should be little to no regular street traffic. The community gardens to the north are a fantastic added bonus to this location. Even if you’re not a gardener, there are acres of land to walk and regular community events. 



Why didn’t this sell faster? 

1. It was listed at the end of the selling season. 


2. At $3.3M, the initial asking price was absurdly high. If you insist on testing the market on price, it’s smarter to begin marketing the home months earlier, before the absorption rate peaks. A better strategy is to actually know the market and price intelligently to the competition. 

3. Arguably, some of the finishes choices were not as hip as the competition.  That seems a minor and easily corrected issue. 

Full disclosure: I serve on the board of the non-profit that operates the community gardens.

919 Balsam Ave | $2.59M


The seller didn’t own this home very long. They acquired it at the end of 2018, two days after the letter of completion was issued by the City of Boulder. Newly constructed by AGR, it features four bedrooms, five baths, and about 3,500 total SQFT. The lot size is a little larger than typical in Newlands at 9,500 SQFT but small by luxury home standards. 


Although the home is directly east of highly desirable North Boulder Park, it’s also subject to development risk by the Alpine Balsam Project.  


From a design perspective, 919 Balsam Avenue has similar features to 3074 15th street, including a nice upper level deck, although it’s much smaller in size. The exterior and interior finishes were a bit more current, and the view over the park is effectively protected. 

Although the reasons weren’t disclosed, the owner listed the home for sale in mid-January for $2.59M.  It was under contract within a week and sold at full asking, or $732/SF.

Lot value: smaller lots (with development risk) can easily exceed $1M in value (read our blog post, Eyes Wide Shut). If you put a discounted $1M value on this lot, the seller essentially paid about $470/SF for almost brand new, turn-key luxury construction. That’s a solid deal, given construction risk and the 12-18 month process of developing from scratch, albeit one that is price adjusted to risk for Alpine Balsam. 


In my opinion, 3074 15th (above) was a smarter deal. Although not quite as central, it’s more private, and the lot size is more than twice as large. Finishes are cheap and can be easily upgraded. Location is the one thing you can’t change.    

2580 Kohler Drive | $2.95M
Another matched pair sale. 


I wrote about this South Boulder home when it hit the market a couple of weeks ago. As expected, it went under contract quickly – within days. 


If you’re looking for our regular review of Boulder’s most compelling new listings, subscribe HERE. 




2580 Kohler Drive is similar in design to the others above – a minimalist, box on box, modern style with an expansive deck on the upper level. This one was plus sized, with five bedrooms, six baths, and nearly 5,900 SQFT. 


It sold on February 27 for $51K over asking or $501/SF. The buyer knew what they wanted, saw the value, and went in guns blazing. The deal closed only six days after they went under contract. Note: I wouldn’t have recommended that pace. Six days is hardly enough time to do even basic due diligence.


The seller meanwhile made out like a bandit, having acquired the home in May of last year for $2.7M. For you investment people, that’s a 12.1% unlevered IRR (before commissions).  

Was it a good deal?  The buyer acquired a relatively rare asset. Homes this large are becoming increasingly difficult to build in Boulder, due to the thick book of regulations that govern development in Boulder. Table Mesa also has Boulder’s best schools, easy access to open space, and far fewer issues with the transient population. 


Did you Realtor fail to mention that factor? Next time, get a better Realtor. 


Analyze This
To help you understand the market for this price range and property type, it’s important to be selective in the data.  


Since 2017, there have been at least forty sales for $2M+ luxury new construction. For this analysis, new construction was defined as built in 2017 or newer and detached.  

Six homes in the data set actually sold twice. None of these matched pairs lost money, despite a short window of ownership. The smallest gain was $100,000 (1.8%, IRR) and the largest was $1,000,000 (56% IRR). The last one by the way is 1515 Sunset – a deal which raises some questions. We’ll talk about that another time, perhaps. 


Take a look at the chart below.

This scatter plots represents $/SQFT for home sales in the City of Boulder valued at $2M or more, built after 2017.  


Key Takeaways: 


1. This segment of the market was slow in 2017, but had higher and relatively consistent sales volume in 2018 and 2019.  


2. The distribution appears to be increasing. 


3.  A few of the data points are outliers. Take the top data point, for example. It’s for 2135 Knollwood, an absolutely stunning, no expense spared dream home in one of Boulder’s most exclusive locations. The home was on the market for a little less than two months and sold at a whopping $1,419/SQFT.  Exclusivity is at least 25% of the value behind a transaction like this one, and it’s not representative of most of the homes in the set. 


4. There seems to be a pattern for higher-end homes to sell later in the year. This may be due to the discounts that are often possible in the late 3Q and 4Q. Anecdotally, this pattern makes sense. It’s when the smart, patient money finally pulls the trigger on deals. There are fewer buyers for the upper end of the market, more failed listings, and ultimately longer negotiations. Late 3Q and early 4Q is also when we’ve helped our clients negotiate the best deals, year after year. 


5. As the first quarter of 2020 nears an end, a tightly banded cluster of sales have occurred between $500 and $600/SQFT.  The market seems to have converged on this as fair value for this type of asset. If you’re shopping in the $2M plus category of homes in Boulder, this is your price benchmark. Adjustments for views, locations, build or finish quality, lot size – everything should start from this point. 

In the Market?  
Before writing an offer, it’s important to understand the comparable sales. Your Realtor should be able to walk you through each sale to help you better understand the market. 

Remember:  Intelligent real estate decisions are based on a deep understanding of the market. At House Einstein, our goal is to help you make a smarter real estate decision. If you’re looking for a real estate team who understands their fiduciary duty and actually cares about helping you, find us HERE.


For the full data set, including the six matched pairs, click HERE.  

Osman Parvez  is the Founder and Employing Broker of House Einstein. Originally from the Finger Lakes region of New York, he lives in Boulder with his wife and their Labrador Retriever. He has been a Realtor since 2005.


Osman is the primary author of the House Einstein blog with over 1,200 published articles about Boulder real estate. His work has also appeared in many other blogs about Boulder as well as mainstream newspapers, including the Wall Street Journal and Daily Camera. For more information, click HERE.

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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties. House Einstein strongly recommends conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. Cover image: Jan Meeus.