Even as data shows Boulder and its surroundings are experiencing a “much-needed” housing market correction, the city last week for the fifth straight year landed atop a national finance researcher’s list of top residential real estate environments for stability and growth.
While the latest Colorado Association of Realtors monthly report declared an end had come to the Boulder County seller’s market, the research firm SmartAsset with a study of 25 years worth of home value data from metro areas across the country highlights there is no reason to panic, with Boulder showing zero chance of homes losing 5% or more in value in the 10 years after purchase.
But whether the plateau in local home sales means first-time homebuyers have a bigger window to invest in a market as strong as Boulder’s is up for debate.
Patrick Brown, a real estate broker working in Boulder and Denver, said the countywide pause on appreciation hasn’t hit Boulder’s entry-level homes as hard as its mid-upper tier.
“More people want to live here if they could. At the lower price points, we’re not seeing much of a softening,” Brown said. “Where we’re seeing the biggest softening has been between the $2 million and $2.5 million (price points). Above $3 million, no softening at all. If anything, there’s a few more (of those) homes on the market. Our really high-end, luxury market seems to be pretty strong right now.”
Yet, according to Dustin Sagrillo, a Realtor with Re/Max of Boulder, that doesn’t necessarily mean prospective first-time homeowners should limit themselves to only looking nearby Boulder rather than in the city proper — a more than decade-old trend that has driven growth booms in Louisville, Lafayette, Longmont and Erie as Boulder prices grew out of reach for most.
“If you’re a first-time home buyer, I think now is as good a time as any,” Sagrillo said.
But he cautioned buyers against exploring publicly financed loans aimed at expanding Boulder’s affordability that come with limits on how much an owner can earn when it comes time to sell, naming especially the city’s new middle-income home buyers assistance initiative, which officials are fine-tuning, as one to avoid when it comes online. City council last week agreed on a hard cap of 2% appreciation on the loans backed by the city through the program to ensure homes’ long-term affordability.
“The whole reason you buy property is to capitalize on the appreciation,” Sagrillo said. “They’re giving that up to have affordability now. I get they need to do that (because) there are people wanting to be close to work.”
For those employed in Boulder, commuting in from the plains might still be the key to affordability, even as the seller’s market calms.
“If it were me, I would go to Brighton or an outlying area. Nobody likes to hear that, but that’s just my opinion,” Sagrillo said. “…Quality of life of being in town is better: walk or bike to work. The trade-off is you’re going to be in a program that caps your opportunity to grow. They have to make the choice.”
He added buyers are gaining power, calling the current market “hyper local,” meaning driven by nitty-gritty property nuances such as traffic counts on adjacent roads.
“Houses that back into busy streets or intersections are standing on the market much longer,” Sagrillo said. “Buyers in the marketplace are going, ‘Well, let me see if something better is coming along.’ As a result, it’s having price adjustments that’s giving you that impression that things are coming down, but really things are just stabilizing.”
