Boulder, Colorado is frequently recognized as one of the best places to live concerning health, well-being, quality of life, education and art. However, in a more recent turn of events, Boulder has established itself among the best of something else: real estate markets. In fact, most of Colorado is experiencing a real estate boom, and Boulder is no exception. Having benefited from its close proximity to Denver, the progress made by the Boulder real estate market appears to be sustainable. Boulder real estate investing, as a result, should see a lot of activity.
With a current median home price of $442,200, the Boulder real estate market is well ahead of the national average. Prices have risen about 5.6 percent in the last year, but the rate of appreciation seems to be tapering. To put things into perspective, homes in the Boulder real estate market have risen in price by as much as 18.3 percent over the last three years. The national average, on the other hand, has seen appreciation rates top out at 28.8 percent in the last three years, bringing the current median home price to just over $200,000.
Of course, any strong real estate market will likely have an equally strong economy to back it up. The same holds true for the Boulder real estate market. With an unemployment rate of 3.6 percent, the city is well below the national average of 5.5 percent. Today’s unemployment rate reflects an impressive 1.4 percent improvement over the course of last year, and looks as if it will keep dropping. The 1-year job growth rate, however, could be improved upon. Right now it stands at 1.7 percent, below the national average. Fortunately, steps have already been taken to increase the amount of jobs available.
The latest move to increase jobs has seen Google break ground on a new Boulder campus. The new site will create approximately 1,000 jobs by 2017. A press release about the project states that Google will be growing “organically” to fill those first 1,000 seats, and Phase 2 will add room for 500 more employees. The entire state of Colorado, for that matter, added more jobs in June than they have in any single month since official counts began back in 1939.
“Locally, we are demographically supercharged,” said Lou Barnes, mortgage banker and member of the Daily Camera editorial advisory board. “The population is leveling out, but Boulder County employment continues to grow.”
The following highlights how much equity has been gained in the Boulder real estate market relative to the year of the home’s purchase:
- Homes purchased in the Boulder housing market one year ago have appreciated, on average, by $29,828. The national average was $15,753 over the same period.
- Homes purchased in the Boulder housing market three years ago have appreciated, on average, by $87,266. The national average was $53,565 over the same period.
- Homes purchased in the Boulder housing market five years ago have appreciated, on average, by $107,495. The national average was $47,444 over the same period.
- Homes purchased in the Boulder housing market seven years ago have appreciated, on average, by $121,070. The national average was $17,200 over the same period.
- Homes purchased in the Boulder housing market nine years ago have appreciated, on average, by $126,918. The national average actually decreased a modest $100 over the same period.
With the local economy expanding and equity returning to the market, new housing construction has increased. Overall, the current level of construction is about 65.8 percent above its long-term average. Single-family housing permits alone have increased by as much as 18.5 percent in the last year. That is nearly six times the national average. The rise in construction suggests that local inventory has stabilized.
Appreciation rates over the past few years have made the prospect of owning a home in the Boulder real estate market that much more difficult. Affordability, for that matter, is a thing of the past. Whereas the average homeowner in the U.S. spends about 14.3 percent of their income on monthly mortgage obligations, homeowners in Boulder spend an average of 16.5 percent.
According to RealtyTrac, Boulder real estate investing may be in for a good year. The median sales price of a non-distressed home was $380,000. The median sales price of a foreclosure home, on the other hand, was $306,670. That is a savings of $73,330; or a discount of nearly 20 percent.
Boulder Real Estate Market Summary:
- Current Median Home Price: $442,200
- 1-Year Appreciation Rate: 5.6%
- Unemployment Rate: 3.6%
- 1-Year Job Growth Rate: 1.7%
- Population: 96,431
- Median Household Income: $83,765