Boulder Valley home buyers in 2016 will face a daunting landscape, with a dearth of inventory, rapidly appreciating prices and multiple-offer situations galore. One city stands out as the best opportunity for investment, especially for first-time home buyers and especially if you do not have $1 million or more to spend.
It’s Longmont. Here’s why:
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Of all the markets in Boulder and Broomfield counties, Longmont is the only one that finished 2015 with average single-family home prices below $350,000 (more than $100,000 less than Broomfield, the second most affordable locale). Longmont also was the most affordable for attached dwellings, with the average unit selling for $244,329. The Federal Housing Finance Agency set the Boulder County 2016 conforming loan limit at $474,950, compared with the regular $417,000. This means that Boulder County buyers have increased purchasing power when using conventional loans, and their money will go farthest in Longmont.
The greatest challenge facing the Boulder Valley real estate market in 2016 is lack of inventory. Unless you are looking in the $1 million-plus range, buyers likely will see less than a month of inventory on the market, and of those about half likely will already be under contract.
Buyers looking for inventory should consider Longmont. In 2015, there were 1,236 single-family homes sold in Longmont, which was almost one-third of all homes sold in Boulder and Broomfield counties (543 more homes than sold in the city of Boulder).
Why the higher inventory of homes in Longmont? First, Longmont is one of the few areas in the county that still has a supply of vacant, developable lots. According to John Covert of Metrostudy, Longmont had the most annual home building starts in the county and has the most vacant developable lots waiting to be developed. These new homes are more affordable, on average, than other new homes being built in the county. Second, Longmont’s prices were slower to recover after the Great Recession than the rest of the county. For example, owners who purchased a home in 2006 had to wait until 2014 for their homes to be worth more than they bought them for. This means that such owners finally can sell their homes without taking a loss.
While it took Longmont a little longer than other local cities to appreciate out of the recession, it now appears poised to enjoy solid appreciation going forward. Last year, the average single-family home appreciated 13 percent in Longmont, and there are reasons to believe this trend will continue. The first is geography. As prices radiate upward and outward from Boulder, Longmont has remained relatively affordable, but as prices have risen in the surrounding cities, upward pressure on Longmont is building. Second, Longmont’s government has been comparatively forward-thinking, pro-growth and pro-housing, which means that there are reasons independent of proximity to Boulder for Longmont’s growth. While not new (more than 100 years old), Longmont Power and Communications has been providing energy to the city for less than the Colorado average, making Longmont an attractive place for business. Now it has added NextLight, a 100 percent fiber-optic broadband that it is rolling out to the city and promises to provide ultrafast Internet. According to Tom Roiniotis, its general manager, it is the fastest speed in the United States. This advantage is promoting more growth and development in Longmont, and means more and better jobs for residents and an increased demand for housing.
The Bottom Line
Longmont offers the best deal in Boulder Valley real estate right now. While relatively affordable, however, it will not necessarily be easy to buy in Longmont. Last year, the average home and attached dwelling sold above its listing price, which is indicative of multiple offers and bidding wars. Buyers in Longmont should expect this trend to continue throughout 2016.
Jay Kalinski is broker/owner of Re/Max of Boulder. He can be reached at email@example.com.