Housing inventory, affordability a concern in Boulder Valley

BOULDER — Facing rising costs and low inventory, homebuilders and residential real estate brokers are grappling with how to ensure that housing supply keeps up with demand.

A pair of keynote speeches at Thursday’s 11th annual Boulder Valley Real Estate Conference presented by BizWest touched on a host of issues that relate to this challenge. The conference took place at the Embassy Suites hotel and attracted more than 500 attendees.

Brad Blackwell, former Wells Fargo Home Lending vice president of housing policy and homeownership growth strategies, and John Covert, MetroStudy’s west region senior director, delivered those speeches.

“There are not enough homes to be purchased today to house all of the people who want to become homebuyers,” Blackwell said. “… This story is repeating itself all over the country … and it is particularly pronounced here in Boulder County.”

Part of that is driven by increased demand. In-migration and the entry of millenials into the home-buying market help to boost that demand. However, Blackwell said, supply — or lack thereof — is the more pressing part of the equation.

“We have a real issue,” he said.

Covert addressed inventory, asking the audience a rhetorical question.

“What’s the way to add to the housing stock?” he said. “Build more homes.”

But that can be easier said than done.

Regulatory costs, high labor costs and zoning that discourages density combine to make it difficult for developers to build enough homes to keep up with demand, Blackwell said.

Supply shortages contribute to higher home prices. The concern, Blackwell said, is when housing becomes too expensive for workers, companies relocate to more affordable areas.

“We don’t want to see that happen in Boulder,” he said.

Despite steady wage increases, income levels have not kept pace with housing costs.

“Purchasing power goes down and down as prices keep going up,” Covert said.

Homebuilders realize the challenges they’re up against, he said.

“Some of the more innovative builders are starting to figure out how to get costs back down,” Covert said. Strategies include building on smaller lots, experimenting with different materials and increasing focus on attached homes such as condominiums and townhouses.  

Despite concerns related to inventory and affordability, Covert stressed that “the fundamentals of our local economy are still very strong.”