Over my career, many people have asked me about the pricing hierarchy in our real estate market. By pricing hierarchy, I mean comparing the average and median prices of homes in our various market areas. California first coined the term “drive until you qualify,” as in the distance you have to drive from a metro area where the jobs are to where a home might be affordable. Now is a perfect time to make this comparison in the current market since statistics are now available for the first half of 2019. The statistics come from our local Multiple Listing Service (MLS) known as IRES. The information is then reviewed and tabulated by Todd Gullette, managing broker at RE/MAX of Boulder.
Below are the rankings of average and median single-family home prices in the nine market areas that we monitor. The areas are defined as follows: Boulder is defined as any area within the city limits; the mountain category is any area west of Boulder, not in any city limits but within Boulder County; Louisville, Superior, Lafayette, Broomfield, Erie, and Longmont are within those respective city limits; the Boulder County market is any area on the plains that is not within one of the mentioned city limits.
Since we are talking “median,” let’s take an example of purchasing power in the high and low markets. In 2019 the median family income was $113,600. Factors vary, such as taxes, insurance, family debt and interest rates, but in general, a $113,600 income will qualify for about a $400,000 loan. That amount is far short of the $990,000 median home price in Boulder. In Longmont, the median family income is $66,349 which would qualify for a loan of about $225,000. Again, far short of the median home price of $435,000. Once the numbers are this distorted, a market tends to slow down until incomes catch up.
Consult your Realtor® to discuss how these market conditions might affect you.
By Duane Duggan. Duane has been a Realtor for RE/MAX of Boulder in Colorado since 1982 and has facilitated over 2,500 transactions over his career, the vast majority from repeat and referred clients. He has been awarded two of the highest honors bestowed by RE/MAX International: The Lifetime Achievement Award and the Circle of Legends Award. Living the life of a Realtor and being immersed in real estate led to the inception of his book, Realtor for Life. For questions, e-mail DuaneDuggan@boulderco.com, call 303.441.5611 or visit boulderco.com.