Don’t you wish you had a crystal ball with perfect 20/20 vision of the future of real estate?
Colorado is an extraordinarily good place to buy real estate, but specifically, Boulder County is a prime location for purchasing property. Over the last 40 years I have been a Realtor® here, we have had solid real estate appreciation and consistency. This is why Boulder has been ranked best housing market nationwide based on home price growth and stability by SmartAsset for the past five years, based 25 years of U.S. housing data.
Hindsight is always perfect, so let’s take a look into the past to help us predict what might happen in the future. At the annual Boulder Valley Real Estate Conference organized by BizWest, Todd Gullette, Managing Broker at RE/MAX of Boulder, shared the following statistics, showing the strength in the Boulder County real estate marketplace.
According to FHFA (Federal Housing Finance Association), the Colorado housing market has appreciated 380.24% since the first quarter of 1991 until the end of the third quarter of 2019, making it one of the strongest markets in the country. The Boulder Standard Metropolitan Statistical Area appreciated 422.64% during that same time frame.
In Boulder County, our inventory of single-family homes peaked in July of 2011 as we came out of a nationwide recessionary period. Although the market was soft, Boulder did not suffer huge losses in real estate values like those that were experienced in Nevada, Arizona, and Florida. Since the peak of the number of homes available in 2011, inventory of available homes has declined to historic lows from 2016 to 2018 with inventory being slightly higher in 2019.
Boulder County single-family homes had an average price of $443,123 in 2010 and rose to $753,405 in 2019. The median price of those homes rose from $367,500. The City of Boulder average home price rose from $74,233 in 2013 to $1,245,000 in 2019. The median price in that same period rose from $642,000 in 2013 to $990,000 in 2019.
The percentage of homes, based on available inventory in all of Boulder County that were under contract, peaked at 42% in 2015. There has been a softening to 41% in 2016, 38% in 2017, 38% in 2018, and 35% in 2019.
All of the statistics presented by Todd Gullette at the Boulder Valley Real Estate Conference are available on the conference website at: bit.ly/2Z2MkIP.
Yet the future will always be a bit fuzzy. 2020 is a Presidential election year, and globally, there is a great deal of political and economic uncertainty.
Nevertheless, regardless of what happens in the world beyond our control, people need a place to live, and population and household creation continues to increase. Since the recession, across the nation, there have not been enough new homes built to keep up with demand. What this means is that housing inventories are likely to remain low, keeping prices steady or slightly rising.
Employment nationally and in Boulder County appears that it will stay strong into 2020. The country is experiencing the longest expansion of Gross Domestic Product (GDP) from June of 2009. The GDP growth rate is still robust but slowing. Strong employment and a vigorous economy bode well for real estate into 2020.
According to Lawrence Yun, Chief Economist and Senior Vice President of Research for National Association of Realtors®, 2020 should see interest rates for home mortgages staying below 4%. Obviously, there are many things that could happen, but if rates stay at 4% or under, the purchasing power of homebuyers remains high.
Keep in mind, however, that all real estate is local. What happens on a national level may not affect your street or neighborhood. Your local Realtor is your best consultant for helping you predict what will happen for you in 2020.
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.