Boulder Valley Re/Con: Election results not expected to shift ongoing real estate trends

BOULDER — For several years, the real estate market in the Boulder Valley has been defined by low inventory, high prices, quick sales, steep regulations and scarce land. 

The results of the 2020 election are not expected to drastically alter any of these trends, local real estate industry leaders said Wednesday during a panel discussion at BizWest’s Boulder Valley Real Estate Conference. 

With the exception of several weeks in March and April, the Boulder-area real estate market has been on fire in 2020, despite the ongoing COVID-19 cirises.

“It’s been the hottest summer and fall that we’ve seen in many years,” said Colorado Association of Realtors vice president of governmental affairs Elizabeth Peetz. 

And while the United States will have a new president in office come January, the factors contributing to the current market conditions are expected to continue.

According to Colorado Association of Homebuilders CEO Ted Leighty, the cost of a home can be broken down into “The Four Ls”: land, lumber, labor and loans. With the exception of loans — interest rates remain at all time lows — the Ls combine locally to create a high-price environment. 

The cost of land is expected to increase as construction of new homes in recent years has eaten into the supply of buildable land, and building materials hit record highs in 2020 and show no signs of becoming more affordable, Leighty said.

Labor costs remain sky high due to the scarcity of skilled construction workers in the local labor pool. Government officials can help address this issue by pushing for federal immigration reform and supporting investments in trade schools, Leighty said. 

The regulatory environment has tightened since last year’s passage of Senate Bill 181, which allows local municipalities to decide how to regulate the oil and gas industry. 

This law, Leighty said, impacts the real estate industry because it allows cities to implement stronger setback requirements for oil companies. This creates “reverse setbacks,” which restrict how close new homes can be built to existing oil and gas operations, regardless of whether the buyers of those homes are willing to live close to those facilities. 

“You’re going to see a lot of uncertainty [with oil and gas regulations], which means you’re not going to see a lot of development” in areas of Northern Colorado where there is a lot of oil and gas activity, Leighty said. 

One of the trends that’s been cited nationwide since the outbreak of the virus is young people fleeing cities for the suburbs. 

Premier Mortgage Group banker Lou Barnes isn’t buying it, at least as that trend applies to the Front Range.

He said he’s not seeing increased vacancies at apartments or increased listings in urban cores comparable to the suburbs.

During election season, social and racial justice was a major topic of discussion. Peetz said the real estate industry ought to be talking about ways to increase homeownership among groups of people who have historically been excluded due to discrimination, predatory loans, poor credit or language barriers. 

© 2020 BizWest Media LLC

BOULDER — For several years, the real estate market in the Boulder Valley has been defined by low inventory, high prices, quick sales, steep regulations and scarce land. 

The results of the 2020 election are not expected to drastically alter any of these trends, local real estate industry leaders said Wednesday during a panel discussion at BizWest’s Boulder Valley Real Estate Conference. 

With the exception of several weeks in March and April, the Boulder-area real estate market has been on fire in 2020, despite the ongoing COVID-19 cirises.

“It’s been the hottest summer and fall that we’ve seen in many years,” said Colorado Association of Realtors vice president of governmental affairs Elizabeth Peetz. 

And while the United States will have a new president in office come January, the factors contributing to the current market conditions are expected to continue.

According to Colorado Association of Homebuilders CEO Ted Leighty, the cost of a home can be broken down into “The Four Ls”: land, lumber, labor and loans. With the exception of loans — interest rates remain at all time lows — the Ls combine locally to create a high-price environment. 

The cost of land is expected to increase as construction of new homes in recent years has eaten into the supply of buildable land, and building materials hit record highs in 2020 and show no signs of becoming more affordable, Leighty said.

Labor costs remain sky high due to the scarcity of skilled construction workers in the local labor pool. Government officials can help address this issue by…