By Ron Rovtar
Cherry Creek Properties LLC
303.981.1617
Something almost inexplicable is happening to Boulder's housing prices. They are rising dramatically -- far more than most of us expected.
This may count as good news for people who have owned Boulder homes for at least a few years. But we can't say it's great news because people who really want to live here are increasingly excluded.
And it's not just the outsiders who have wanted –– even planned –– to move to Boulder for some time.
Many who now rent in Boulder are watching dreams of owning vanish. Worse, continuing to rent is becoming a less viable option for many. Rents are rising and will continue to rise, forcing some to reconsider staying when leases expire.
Meanwhile, some current homeowners may have to leave a city they've come to love. Increased property taxes, higher home insurance premiums and other rising costs can create serious problems, especially those on fixed incomes.
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| This graph shows how average (red bars) and median (orange bars) detached home prices have grown in Boulder since 2002. The Blue and green bars show average and median prices during the first four months of this year. |
Consider the numbers.
Home sale prices for Boulder houses during the first four months of this year (the blue line on the graph above) have averaged $885,000. This is $67,800 higher than average prices during all of 2014. Median house prices (the green line) jumped $40,000 to $725,000.
More to the point, average house prices have jumped $218,000 since 2012. Median prices rose $155,000 during the same period. These are huge jumps for less than two-and-a-half years, even when one considers that prices were fairly stable for several years prior.
Prices for "attached dwellings" like condos, duplexes and townhouses also rose.
The average price for an attached home sold during the first four months of 2015 was $376,000, a rise of $15,000 over the average during all of 2014. The median jumped $9,000 for the same periods. The average attached residence price rose $68,000 between 2012 and the first four months of this year. The median was up $46,000 during the same period.
 |
| This graph shows how average (red bars) and median (orange bars) attached home prices have grown in Boulder since 2002. The Blue and green bars show average and median prices during the first four months of this year. Attached dwellings include condos, townhouses and duplexes. |
So why is this happening? A couple reasons come to mind. Both are supply issues.
First, very few new homes have been built in Boulder since before the recession. The economy may have slowed development, but there really are serious impediments to development here anyway.
Developers suggest complying with Boulder's planning regulations can make profitability difficult, causing them to hesitate about even starting new projects.
Since the early 1970s the city has passed a series of measures that control expansion and, therefore, development. Boulder is landlocked and height-locked by design, leaving less development space.
Local appetite for controlling growth continues to grow, at least in some quarters.
Second, inventory of existing homes for sale in Boulder is low by recent standards. Homeowners are staying put, often because they dread having to find replacement homes.
So upward pressure on prices does compute, at least to a point. Supply is low, so prices rise.
What does not fully compute is demand; why it remains so strong even as prices climb into the stratosphere.
Typically people find alternative solutions to high prices. And this we have seen. Some homeowners are indeed staying in current homes longer than expected. Many younger folks live with parents or other relatives, putting off the urge to strike out on their own.
We've also seen many renters hunt for homes to buy, only to sign a new lease after realizing how long and tedious searching can become; and how disappointing it can be to lose a bidding war for an absolutely perfect dwelling; and how agonizing this can be when it happens for the third or fourth time.
But, no matter how many would-be buyers leave the market, demand stays strong –– strong enough to push prices heavenward. This is what does not compute. We just don't know where all the buyers come from.
So we wonder when will it end? And how will it end?
Are we in a bubble? Or is something else at play?
Predicting when this buyer's market will cool or even end seems impossible. But it is showing no signs of slowing yet.
Nice homes continue to go under contract within a few days after listing –– some not-so-nice homes also. Additionally, closings continue at ever higher prices.
We've followed 11 specific homes since before they went under contract. All closed in May for prices between $475,000 and $630,000. The home listed for $630,000 sold for the asking price.
But, taken together, the 11 homes (five condos and six houses) closed for prices on average $23,860 above asking prices, which may mean the blue and green lines on the graphs above will grow taller when we get new numbers for a full six months of 2015 Boulder sales.
Who knows what happens afterward?
Your thoughts?
–––––––––––––––––––––––––
Note: Home prices in Boulder appear to have risen considerably faster than increases reported nationally. We've stayed away from comparisons because regional differences and even differences in how numbers are collected can make valid comparisons difficult.
All Boulder numbers come from the Boulder Area Realtors Association and the IRES Multiple Listing Service.
––––––––––––––––––––––––––
Ron Rovtar, Cherry Creek Properties, LLC, is a broker associate in Boulder, CO. Please call Ron with all your questions. He can be reached at 303.981.1617. To learn more about Ron, please visit his website. For more about life in Boulder County and nearby, check out our facebook page. Ron Rovtar does business as Front Range Real Estate, Ltd. All photos © Ron Rovtar
#Boulder
#Homes
#RealEstate
#Prices
Developers suggest complying with Boulder's planning regulations can make profitability difficult, causing them to hesitate about even starting new projects.
Since the early 1970s the city has passed a series of measures that control expansion and, therefore, development. Boulder is landlocked and height-locked by design, leaving less development space.
Local appetite for controlling growth continues to grow, at least in some quarters.
Second, inventory of existing homes for sale in Boulder is low by recent standards. Homeowners are staying put, often because they dread having to find replacement homes.
So upward pressure on prices does compute, at least to a point. Supply is low, so prices rise.
What does not fully compute is demand; why it remains so strong even as prices climb into the stratosphere.
Typically people find alternative solutions to high prices. And this we have seen. Some homeowners are indeed staying in current homes longer than expected. Many younger folks live with parents or other relatives, putting off the urge to strike out on their own.
We've also seen many renters hunt for homes to buy, only to sign a new lease after realizing how long and tedious searching can become; and how disappointing it can be to lose a bidding war for an absolutely perfect dwelling; and how agonizing this can be when it happens for the third or fourth time.
But, no matter how many would-be buyers leave the market, demand stays strong –– strong enough to push prices heavenward. This is what does not compute. We just don't know where all the buyers come from.
So we wonder when will it end? And how will it end?
Are we in a bubble? Or is something else at play?
Predicting when this buyer's market will cool or even end seems impossible. But it is showing no signs of slowing yet.
Nice homes continue to go under contract within a few days after listing –– some not-so-nice homes also. Additionally, closings continue at ever higher prices.
We've followed 11 specific homes since before they went under contract. All closed in May for prices between $475,000 and $630,000. The home listed for $630,000 sold for the asking price.
But, taken together, the 11 homes (five condos and six houses) closed for prices on average $23,860 above asking prices, which may mean the blue and green lines on the graphs above will grow taller when we get new numbers for a full six months of 2015 Boulder sales.
Who knows what happens afterward?
Your thoughts?
–––––––––––––––––––––––––
Note: Home prices in Boulder appear to have risen considerably faster than increases reported nationally. We've stayed away from comparisons because regional differences and even differences in how numbers are collected can make valid comparisons difficult.
All Boulder numbers come from the Boulder Area Realtors Association and the IRES Multiple Listing Service.
––––––––––––––––––––––––––
Ron Rovtar, Cherry Creek Properties, LLC, is a broker associate in Boulder, CO. Please call Ron with all your questions. He can be reached at 303.981.1617. To learn more about Ron, please visit his website. For more about life in Boulder County and nearby, check out our facebook page. Ron Rovtar does business as Front Range Real Estate, Ltd. All photos © Ron Rovtar
#Boulder
#Homes
#RealEstate
#Prices
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