With average home prices at an all-time high in the City of Boulder, I’m often asked if Boulder remains a good place to buy a home or if we are headed for another bubble burst. The following are the top five reasons to buy as soon as you can (if you can):
• A safe bet. According to the Federal Housing Finance Agency, Boulder has had the highest housing appreciation of any city in the country since 1991. In fact, if you purchased a home in 1991, you would have experienced a 276 percent appreciation in the value of your home. In a study published in July, SmartAsset named Boulder the number one housing market in the country for growth and stability.
According to the study, your chance of losing money over the next five years on a home purchased in Boulder now is 0 percent. Since 1990, Boulder has never seen a decline in home values of more than 5 percent.
• Quality of life. Boulder tops the list of so many quality-of-life surveys that it would be hard to count them all. These accolades are well founded. Nestled at the foot of the iconic Flatirons, Boulder enjoys more than 300 days of sun per year, 145 miles of trails on more than 100,000 acres of open space, the best-educated workforce in the country, and the Pearl Street Pedestrian Mall, to name but a few features.
• Purchasing power. The Federal Housing Finance Agency announced that conforming loan limits in Boulder County beginning Jan. 1 will be $474,950, making it easier to use a conventional loan to buy a home in Boulder, where the median sales price was $788,000 at the close of the third quarter. Interest rates are near the lowest levels we are likely to see in our lifetimes. Even assuming the Federal Reserve Board raises rates by 25 basis points, this is your best opportunity to buy in Boulder, possibly forever.
• Low inventory likely to linger. The inventory of homes for sale in Boulder is the lowest it has been since at least 2000. At the close of the third quarter, there were 201 single-family homes on the market in Boulder, of which 42 percent were already under contract. A balanced market has five to seven months of inventory (that is, if no more homes were to come on the market, it would take five to seven months to sell the existing homes on the market). As of the end of September, there were only 3.4 months of inventory in Boulder. Normally, buyers might be encouraged to wait until the market balances, however, all indications are that the inventory shortage is likely to continue.
• Structural housing demands. First, there are myriad government agencies with facilities in Boulder, most prominently the National Center for Atmospheric Research, the National Institute for Standards and Technology and the National Oceanic and Atmospheric Administration. The stability of such government jobs is well known, but lesser known is that, according to the Bureau of Labor Statistics, the government sector employs the highest percentage of people in the Boulder area. Second, the University of Colorado at Boulder student body numbers more than 30,000. When nearly 7,000 faculty and staff are added in, the housing demand created by the university is both substantial and likely to increase over time.
• And bonus reason number 6 …
The Google effect. The fact that Google is building a 300,000+-square-foot building to house up to 1,500 workers in Boulder is no longer a secret. It is also no secret that, according to Bloomberg, Boulder is the best place in the country for tech startups. With the expansion of the startup community in Boulder, experts are anticipating even greater housing demand.
The bottom line: Buy in Boulder while you still can.
Jay Kalinski is broker/owner of Re/Max of Boulder. He can be reached at firstname.lastname@example.org.