Boulder is sometimes lovingly referred to the “Boulder Bubble” – or as some people like to refer to it, 25 square miles surrounded by reality. Boulderites pride themselves on a high quality of life, beautiful town, and a self-assured approach to how the world should be. Self-deprecating monikers aside, it’s considered an idyllic location to live, work, and recreate. A desirable location in consistent demand can be paired with a less desirable result: high real estate costs. Boulder’s real estate market prices have climbed for years. The question that homebuyers, sellers, and Realtors are asking is, “Is the Boulder Bubble in a real estate bubble?” And furthermore, “Will the bubble burst?”
Let’s back up and define what a real estate bubble means. A bubble is a fast increase in home prices, which may or may not reflect the true value of a property. The concern is that it can be followed by a burst of lost value. This sends home buyers and investors into a tailspin of worry in whether they’re spending too much on an overvalued property and won’t make up the difference at resale. Key indicators help forecast a locality’s bubble, including home and rental unit inventory, income stability, interest rates, mortgage lending practices, and housing appreciation. When it comes to the city of Boulder, the question remains if it’s in a burstable bubble or if home prices will continue to rise – and hold their value.
The answer is that there are not really enough indicators to call this a bubble. While home values have appreciated greater than salary and home values, the only concerning indicator is affordability. In late 2017 the average home price within city limits hovers around one million dollars. Yet other key indicators remain stable. Generally speaking, in 2017 inventory is up over 2016 and pricing is leveling out in city of Boulder. Unemployment is low, migration into Boulder remains high, and stable salaries are enjoyed thanks in part to university, government, and high-tech jobs. So instead of waiting for a burst, we should expect continued high home prices. Boulder home prices should be balancing out versus growing rapidly for the foreseeable future.
In other words, there’s a “shift” in Boulder more than outlying markets such as Louisville, Longmont, and Superior. These real estate prices are the new norm.
This is a great time to buy or sell a home, as prices remain high but stable. Home sellers shouldn’t hesitate to sell their home as low inventory creates urgency for home buyers to take action. Home buyers shouldn’t wait to see if overall prices decrease . There are ways to strategize to your advantage no matter which side of the table you sit on. Contact me to discuss your next move. I’ll give you straight answers; I won’t burst your bubble!