Wave of wealthy out-of-town buyers pushes up Boulder home prices

A spate of sales of $2 million-plus homes in Boulder has pushed the average price of a single-family house to $1.2 million. Despite the eye-popping number, real estate agents say it is Boulder’s relative global affordability that is attracting out-of-town buyers.

Re/Max of Boulder co-owner Jay Kalinski originally reported on the increase in a column for BizWest. In it, he noted that the figure represented a staggering 21 percent year-over-year for the first quarter of 2018.

While that’s certainly true, said DB Wilson, also of Re/Max of Boulder, it indicates high demand on the high end, not a new normal for Boulder. Median price, the preferred measure to gauge an area’s cost, is a (still astonishing) $900,000, up only 3.8 percent over early 2017.

Activity in the $2 million-and-over market ticked up precipitously, with 18 such first-quarter sales in the city of Boulder. That’s up from five during last year’s first quarter, and more than triple the five-year high (seven in 2015). Two-million dollar home sales have not exceeded single digits in any of the previous five years.

Multi-million dollar deals have even pushed up the average price of more affordable condos and townhomes. A $5.5 million condo in downtown Boulder largely drove a 23 percent increase in average price over 2017.

With so few sales overall — inventory of single-family and attached dwellings are at or near all-time lows — ultra high-end sales throw data “out of whack,” Wilson said. He predicts that the typically slower second half of the year will temper the early appreciation, though “we’ll still end 2018 up substantially.”

Meanwhile, ultra-expensive houses are still being scooped up. There were 10 sales of $2 million homes in April alone, Wilson said.

Transplants are largely driving the demand. California is a heavy contributor, said Greg Smith of Re/Max Alliance, whose agents have sold seven homes for $2 million or more in the past six months. Buyers have been a mix of empty nesters, families and one single female.

Jay Hebb said his firm, PorchLight Real Estate Group, has worked with buyers moving from Singapore, China, Japan and Switzerland, as well as “a lot of” Silicon Valley and San Francisco. They are drawn in by the quality of life, and house, they can purchase.

“Two million (dollars) is nothing to shake a stick at, but the reality is some people are moving out of small ranches and are surprised they can get 4,000-square-foot houses” here, Hebb said. “Boulder is actually quite affordable compared to many places in the country and world where a lot of these buyers are moving from.”

Locals are also upgrading, taking advantage of major equity gains, according to Hebb. And a preponderance of scrape-and-replace properties being sold is pushing up costs, Smith said: As older homes are knocked down, newly constructed homes become larger and more energy efficient, and are able to command higher prices.

The continual upward march of the market, which Kalinski referenced in his piece, can also not be ignored, Hebb said.

“That’s the harsh reality of Boulder. In our core neighborhoods if somebody wants four- or five-bedroom home, now that’s what it takes.”

Shay Castle: 303-473-1626, castles@dailycamera.com or twitter.com/shayshinecastle