Enclave Neighborhood in Louisville, Colorado After the Fire

Dave Janis, real estate agent and developer in Boulder, Colorado.  

Today I want to talk about Enclave, a neighborhood that was damaged by the Marshall fire.  Located in Louisville, west of McCaslin Blvd and south of Davidson Mesa, it was an upscale neighborhood with a perched view of the front range.  Before the fire, houses in that neighborhood were selling from $850,000 - $1,400,000, but were reaching the point where they needed to be updated; about 20-30 years old.

So what is the land value in that neighborhood?

There is a lot at 1127 W Enclave Circle that I’m going to look at this afternoon. That property was listed two weeks ago for $950,000, and today is at $799,000. It is a ½ acre lot on Davidson Mesa, which makes it one of the premier lots in the Enclave subdivision.  Once it is redeveloped, due to location and size, it could possibly be the most expensive property in the subdivision. This lot has expansive views from Longs Peak all the way across the southern range. I believe that if you build a really nice house on this lot, you could most likely sell it for close to $3,000,000. 

So what would a builder or developer pay for the lot of a potential $3,000,000 house? 

There are three different ways to look at this; the first being quick and easy, by paying 20%-25% of the end sales price. In this example, 20% is $600,000 and $25% is roughly $750,000, so I think we are in the ballpark at the listed $799,000. The second way is to look at the Boulder County Land Assessment Value.  For this property, the land assessment value is $604,000, which again is not that far off and seems pretty accurate. The final way to look at it is to work backwards.

   $3,000,000 House

– Real Estate Commissions & Closing Costs= $2,8200,000

– $1,600,000 Building Cost = $1,220,000

– $120,000 Carrying Costs = $1,100,000

– $800,000 Cost of the Lot = $300,000 Profit

Now as a developer, investor, homeowner, is $300,000 profit enough to take on the risk to build a $3,000,000 house?  Not knowing what the market is going to be like 2-3 years from now, do you want to risk tying up your money for that long? I don’t know, I’m just trying to give you an idea of how people are looking at market values. 

I’m going to be looking at a couple of other neighborhoods as well, but wanted to talk about that lot in particular because it is currently for sale and is one of the best lots in all of Enclave. In our current market, I do think a home on this lot could sell for $3,000,000 when done right. If you have any questions or want to chat about it, give me a call 303.442.5001. Thanks!

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