Boulder County Market Statistics Q3

Source: IRES Inc.

Boulder home prices remain steady in face of uncertainty

While many U.S. communities are experiencing depreciation of their homes – some even in the double digits in coastal states such as California and Florida – Boulder’s home prices have held steady over the last year.

Recent numbers from IRES shows existing-home prices within the city of Boulder increased 3 percent in the third quarter of 2007 compared with the same period last year. And the latest figures from the National Association of Realtors showed that while the median price of existing homes in the Boulder-Longmont area has fluctuated slightly since the third quarter of 2006, the median price for the third quarter of 2007 remained unchanged from the previous year. The median home price for the U.S. dropped 2 percent in the same period.

Ken Hotard, vice president of public relations for the Boulder Area Realtor Association (BARA), attributed the local market’s strength to the absence of rapid appreciation of home values in past years that occurred along the nation’s coasts.

“We never really did have a bubble,” he says.

Boulder also remains a popular home town, with its location offering a plethora of indoor and outdoor recreational opportunities, open space, federal laboratories and a healthy entertainment environment, Hotard says.

“Basic economics 101 will tell you that simple supply and demand plays a role here,” he says, noting Boulder’s high quality of living makes it a desirable place to live, but it has a limited ability to grow and, therefore, a limited supply of housing.

A recent study of Boulder’s affordable housing by BARA, in cooperation with the University of Colorado Real Estate Center and Leeds School of Business Research Division, showed clearly that the city of Boulder has a wealth-based housing market and local economy, Hotard says.

In other words, the city’s residents’ median income of $80,000 would not support the median home price, he says. In fact, 30 percent of all homeowners in the city of Boulder have no mortgage, which means they either paid cash for their homes or they have lived here long enough to have paid off their mortgages.

Nonetheless, Boulder-area homes are not appreciating as much as they have in years past because of the slower economy and less job growth, Hotard says.

“There’s been some but there hasn’t been like there was in the ’90s,” he says.

From 1990 to 2000, the average appreciation of Boulder homes was just over 10 percent, Hotard says. However, a housing study under way now shows that over the last 25 years, the annual appreciation rate for homes in Boulder city limits is 6.2 percent, and for Boulder County homes it is 4.8 percent.

Hotard says a 4 percent to 6 percent appreciation rate represents a healthy, sustainable market that makes purchasing real estate a wise long-term investment.

A 3 percent appreciation rate, though not as good, reflects a stable market, he says.

“That covers inflation,” Hotard says. “You’re not losing money but you’re not gaining much.”

Hotard predicts that the appreciation rate will remain stable and relatively unchanged until 2009 or 2010 in the absence of economy-impacting positive or negative events.

Once a new president and Congress are in place in 2009, it will take a while until it is clear how those changes will affect the real estate market, Hotard says.

Boulder’s economy remains steady

The Boulder metropolitan statistical area ranked high on the Milken Institute/Greenstreet Partners’ 2007 Best Performing Cities list of 200 large metros for job creation. However, it slipped one in ranking for overall economic performance. Here’s a look at how Boulder compares with Colorado’s other metro areas that appeared on the list:



Source: Milken Institute/Greenstreet Partners’ 2007 Best Performing Cities

Summit County Real Estate

Our featured vacation destination for November is Summit County, Colorado. Summit County is a unique area that includes four world-class ski areas, beautiful Lake Dillon and year-round fun family activities in the White River National Forest. The recent trend in appreciation of resort homes makes purchasing a vacation property in Summit County an appetizing option.

The official third quarter stats are in and the Summit County average sales price is up 20.61 percent! Some of the higher areas are Breckenridge with a 22.25 percent increase, Silverthorne and Wildernest with a 26.99 percent increase, and Keystone with a 31.24 percent increase in average sales price. These are big, big – very big - increases.

Think about it this way: last year, someone could have picked up resort property here for an average cost of $433,380. This year that same average cost is at $522,682 – or $89,302 more. In 2005 that average would have been $377,000, and in 2004 the year-end average sale price for Summit County was $336,343!

Those who have purchased property in Summit County have not only enjoyed living there over the past few years but some substantial gains in the value of their property, as well. With that said, three years from now looking back over our shoulders at the average sale price for 2007, 2008 and 2009 will be ...

Don't wait any longer; take this opportunity to talk to your RE/MAX of Boulder agent about vacation properties in Summit County.

Boulder rental market sizzles in midst of mortgage cool-down

While stricter mortgage-lending requirements and stagnant appreciation rates have all but put the brakes on some real estate markets, the rental market is full-speed ahead – especially in Boulder city limits.

“It’s very hot,” says Sheila Horton, executive director of the Boulder Area Rental Housing Association. “It’s been a very solid market. It’s the strongest market we’ve seen in several years.”

How hot is it?

Horton says people are already asking to pre-lease units for next year, when renters don’t usually start leasing until January or February.

“I think the mortgage problems have caused people to reconsider the value of living in an apartment,” she says.

Colorado Apartment Insights LLC reports that the south Boulder market (south of Arapahoe Road) had the lowest vacancy rate – 3.2% - of the seven-county Denver metro market in the third quarter of 2007. The north Boulder market (north of Arapahoe Road) is also doing well, with a 4.1 percent vacancy rate during the same period.

With fewer people moving out of rentals and into their own homes, combined with growing enrollment at the University of Colorado, Boulder also has more demand for rental units, Horton says.

“That has a big impact in our market,” she says, noting the university’s sophomore class had about 500 more students than the class before when they entered as freshmen.

By nature of its high cost of living, Boulder tends to have more residents who rent rather than buy a home, Horton says.

“Current statistics say about 53 percent of everyone who lives in Boulder rents,” she says, quoting U.S. Census Bureau data and an affordable-housing study by CU’s Leeds School of Business. “Of that 53 percent, about 28 percent of them are students. People think about Boulder as student housing, but a high percentage of those who rent in Boulder are not students.”

Boulder has not seen the high foreclosure rate that has affected other communities, Horton says. One reason why is if Boulder homeowners can’t sell their single-family homes, they convert them into rentals.

“There are certainly rental properties on the market,” she says, from single-family houses to large complexes, for those who want to get in on the rental action while it’s hot.

What investors should understand if they buy property in Boulder is that the city has strict occupancy limits, Horton says. The city bases these limits on location and not the number of bedrooms in a property, so potential owners need to know what the limits are prior to making a purchase.

Buyers want cool homes with big garages and room to play

According to the 2006 National Association of Realtors’ Profile of Buyers’ Home Feature Preferences survey, staying cool still tops the list; however, a backyard or play area and high-speed Internet access broke into the top nine features and oversize garages grew in popularity since the last survey in 2004. Here’s a look at the home features most desirable to buyers:

Source: National Association of Realtors research