A tale of two markets emerged in November, as Boulder County’s single-family home sales skidded to a stop, while townhomes and condos took a significant leap forward.
Single-family home sales in the Boulder-area markets dropped 14.4 percent in November compared to October —310 vs. 362 homes—while condominium and townhome sales rose 14.5 percent—126 units vs. 110.
Yet when data for 2018’s first 11 months is considered, the two markets tracked closely together, and both appear to be slowing, according to Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor® Association.
“This is the first month single-family home sales fell below last year, and condos and townhomes are only slightly ahead,” Hotard explains.
Year-to-date through November, sales of single-family homes decreased 1.4 percent compared to the prior year with 4,205 homes sold vs. 4,266. Attached home sales over the same period improved 3.3 percent – 1,445 vs. 1,399 units sold.
Inventory decreased in both housing categories, though more significantly for single-family homes, which dropped 13.1 percent in November compared to October with 821 vs. 945 Boulder County homes for sale. Condo/townhome inventory fell 6.1 percent in November compared to the previous month with 263 units for sale vs. 280.
“My guess is the growth of the townhome/condo market is due to a larger inventory and more affordable pricing,” says Hotard. “Interest rates are making people jumpy, but the reality is that mortgage rates are still historically low. The more complete view is the inventory and pricing dynamics of the Boulder-area markets.”
He notes that single-family home sales could recover in December, but it’s not likely.
“We have the ongoing headwinds of low inventory and rising prices. When we look back, we’ll see 2018 as market slowdown for housing in our market areas,” Hotard predicts.
Despite the slow-down in housing, Colorado’s economy continues to show strength, wage growth is increasing, and gross domestic product is up, according to recent news reports.
“What the Boulder-area needs is more housing that is desirable and more affordable for people,” adds Hotard.
If there is one constant in Boulder Valley, it’s a strong real estate market. October’s sales statistics show 2018 is on track to finish strong. This is despite that month-to-month, those statistics sometimes show significant fluctuation.
Take September and October 2018. When compared to October, September’s data is like Colorado weather: If you don’t like the statistics one month, wait a month, they are likely to change.
September’s single-family sales dropped 20 percent, then recovered to gain 8.7 percent in October with 362 homes sold vs. September’s 333. Despite the short-term fluctuation, year-to-date sales are holding steady through October, reaching just one unit short of the same volume as last year – 3,880 vs. 3,881.
“It’s hard to characterize our market here in Boulder County. Given all of the factors, it can be difficult to decipher trends as opposed to an event,” says Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor® Association.
“While the swings add volatility to the market, the market exhibits good health with strong demand, and prices and sales holding steady,” he says, adding that a strong economy and job growth continue to be drivers.
Condo/townhomes in Boulder County saw a month-over-month sales decrease of 5.2 percent, with 110 units sold in October compared to 116 in September. Year-to-date attached dwelling sales rose 4 percent through October – 1,317 vs. 1,266.
October’s inventory for attached dwellings also increased 7.3 percent over September with 280 units available in October compared to 261 the prior month. Single-family home inventory declined 10 percent, with 945 homes available for sale in October compared to 1,050 in September 2018.
Hotard projects November and December sales will be “anybody’s guess depending on the weather. But all things being equal, I don’t expect much change through the end of the year.”
The next big change he expects will be in early 2019. “I think we’ll see a big increase in inventory and sales in February and March. I think people will look at taking the gains we have seen in this market, providing inventory and set the market up for pretty strong increases in the big home selling months.”
A beautiful new kitchen is often the renovation homeowners dream of. But if getting a high return on investment (ROI) is at the top of your checklist, you may want to consider doing exterior work instead.
Seven out of the ten highest payback projects are exterior renovations, according to Remodeling Magazine Cost vs. Value Report 2018. Except for a minor kitchen remodel, work done on the exterior of the house generated higher returns than did interior renovations.
Here are the five renovations that give the highest return, according to Remodeling Magazine.
Garage door replacement
A new garage door can give your home instant curb appeal. Expect to spend about $3,500 to install a new 16×7-foot windowed garage door with lifetime warranty and new heavy-duty galvanized steel tracks. Average ROI is 98.3 percent nationwide and 96.7 percent in the mountain region.
Remodeling Magazine’s mountain region includes Colorado, New Mexico, Idaho, Nevada, Utah, Arizona, Wyoming and Montana.
Manufactured stone veneer
Stone is a popular siding, particularly in Colorado. Adding stone to your home’s exterior gives it character and gives high payback when you sell. At a cost of $8,221, ROI in the mountain region is 93.8 percent and 97.1 percent nationwide.
Wood deck addition
Speaking of trends, inviting outdoor living areas are hot, so wood deck additions add desirability to your home. Estimated cost is $10,950. Average payback in the mountains is higher than across the nation—84 percent compared to 82.
Minor kitchen remodel
At last, we can talk about redoing the kitchen. Expect to spend $21,198 to replace some of the components in your kitchen such as fronts of existing cabinet boxes and drawers, new hardware, new energy-efficient cooktop/oven range combination and refrigerator, laminate counter tops, and flooring. Average mountain region payback is just under 84 percent, and 81 percent nationwide.
A $15,072 investment to replace old warped or cracked siding with new can help sell your home. You will get around 65 percent of that back here in Colorado and almost 77 percent nationwide.
Here are the top ten renovations with the highest payback.
For the full report, visit http://www.remodeling.hw.net/cost-vs-value/2018/key-trends-in-the-2018-cost-vs-value-report
The highly anticipated Boulder Valley Real Estate Conference will be here soon! It will be held on Thursday, November 15, featuring an outstanding line-up of speakers and panelists who will discuss the latest issues and trends in local real estate from our tech economy, Bitcoin, and development projects along the Front Range to housing policy, housing stock, and insights into commercial real estate. RE/MAX of Boulder is proud to be the presenting sponsor. Our Broker/Owner Jay Kalinski and Realtor Duane Duggan speak with conference organizer Chris Wood from BizWest to give you the details. Click below to see the video.
Colorado’s economy continues to expand in 2018, even after signaling a slowdown at the beginning of the year. Job growth was revised upward to 2.4 percent growth for the year, according to the mid-year economic report from the Leeds Business Research Division at the University of Colorado Boulder.
The rebound follows a slowing of employment growth last September to less than 1.9 percent – the lowest level in almost six years. In June 2018, job growth increased 2.8 percent year-over-year.
The increase means about 15,000 more jobs than expected will be added through 2018, bringing the total to 62,000 new jobs by the end of the year.
The state’s gross domestic product also rose 4.5 percent year-over-year for first quarter 2018. The increase shows Colorado’s economy is continuing to grow after slowing to just 1.4 percent in 2016— the lowest level since 2010. Economic output rose to 3.6 percent in 2017.
Meanwhile, Colorado still has one of the lowest unemployment rates in the nation, logged in June 2018 at 2.7 percent. While fewer people have been moving to Colorado – dropping from 67,781 in 2016 to 46,626 in 2017 – more Coloradans are going into the labor force. The increase in workers has enabled continued employment growth, despite the decrease of people moving to the state.
Sectors leading the way in job growth are natural resources and mining, and construction.
Natural resources and mining have shown strong employment growth, according to Business Research Division Executive Director Richard Wobbekind. “Energy prices are obviously factoring into it,” Wobbekind notes.
The construction industry is “finally back to the same level of employment that they were at pre-recession. They are really mostly constrained by lack of available workforce,” he says.
While a shortage of skilled labor continues to challenge the construction industry, Bureau of Labor Statistics data shows construction employment across the state was 171,200 in June 2018, a 5.2 percent year-over-year increase. This surpasses the last peak of 170,100 in July 2007. Average annual pay for construction workers was $59,446 in 2017, slightly above the average Colorado pay of $56,916.
Agriculture’s outlook is not as robust, however. Drought, wildfires, and low prices are slowing growth. For example, corn prices have declined more than 30 percent from five years ago.
“It’s a tough road to hoe in some of the rural areas,” Wobbekind said.
Read the full Mid-Year Economic Update at https://www.colorado.edu/business/2018/08/17/state-economy-adding-thousands-more-jobs-expected-report-predicts
Colorado Springs’ 80922 zip code is the No. 2 spot hottest zip code in the country – moving up from No. 7 in 2017, according to analysis of 32,000 zip codes by realtor.com®.
The annual analysis of zip codes looks at how long it takes homes to sell and how frequently properties in each zip code are viewed to determine which zip codes are most popular and fastest moving.
Greeley’s 80631 and Broomfield’s 80021 zip codes also ranked in the top 50 hottest, coming in at Nos. 44 and 48 respectively.
High-income millennials helped fuel a 10 percent rise in how fast homes sold in popular areas in 2018. More and more millennials are getting older and buying homes, which realtor.com says is driving demand in smaller, more affordable suburban areas. These 25- to 34-year-olds are attracted to affordability, strong local economies, and outdoor and cultural amenities.
The number of households in Colorado Springs grew 21 percent from 2010-2018. Homes in El Paso County sell in 15 days with a median list price of $297,811 – an increase of 9.7 percent in the last year. Located 60 miles south of Denver, Colorado Springs offers lifestyle features millennials want – outdoor activities, popular local breweries, and more affordable housing than Denver.
Here are the top ten hottest zip codes in the U.S.
Homes in the top 10 hottest markets sell in 20 days on average, 46 days faster than the rest of the country, 25 days faster than their respective metro areas, and 18 days faster than their respective counties.
In eight out of the top 10 ZIPs, millennial median household income is 1.3 times higher than the national median, $78,000 versus $60,000, respectively. Mortgage originations in nine of the top 10 counties are millennial-dominated with 34 percent of mortgage originations.
For the full report visit https://www.realtor.com/research/hottest-zip-codes-2018/
Boulder is known for its highly educated, technology-oriented citizenry. The city is even ranked No. 1 nationally in the “Bloomberg Brain Concentration Index,” which tracks business formation as well as employment and education in the sciences, technology, engineering, and mathematics.
But does that make Boulder a smart city? Not according to Colorado Smart Cities Alliance (CSCA). CSCA might summarize a smart city as an environment that works well for the people who live in it.
Specifically, CSCA defines a smart city “as an environment that enables all of us to effectively and efficiently live, work, and play. It leverages advancements in science and technology to create an area that is intelligent about strategic and tactical needs and wants of all the constituents.”
Boulder, Longmont, and Fort Collins are among a dozen cities along the Front Range that are founding members of the CSCA. Founded in 2017 by the Denver South Economic Development, CSCA is an open, collaborative, and active platform where stakeholders work to collaborate on continually improving the region’s economic foundations for future generations. The initiative aims to make Colorado a leader in the development of intelligent infrastructure. The goal is to accelerate the development of statewide Smart City initiatives that will improve our play, family, and work lives, from transportation and housing to public safety and the environment.
In ColoradoBiz Magazine, DesignThinkingDenver’s CEO Joe Hark Harold says, smart cities could design systems that save water and energy, reduce traffic and traffic congestion, lessen crime, better prepare for disasters, provide better connections between business and customers, and even manage the lights remotely.
There is urgency behind this movement, driven by an increase of those who live in urban environments. More than three million additional people are expected to move to Colorado by 2050 — an increase of more than 50 percent from 2015, according to the Colorado State Demography Office. Coupled with the growth the state has already experienced, the projected increase has spurred community leaders to collaborate on finding innovative, cost-effective ways to better monitor, manage, and improve infrastructure and public services.
“The Colorado Smart Cities Alliance is advancing policies and technologies that will better equip Colorado residents to live, work, and play in a future that is increasingly being shaped by the complex challenges of urban growth,” says Jake Rishavy, vice president of innovation at the Denver South Economic Development Partnership. “We’re working to create a 21st-century technology infrastructure right here in Colorado that will help to enhance everyone’s quality of life, particularly as our communities continue to grow.”
Among its activities, CSCA hosts regular “Civic Labs” events around the state to share challenges, expertise and solutions. At the Denver Smart City Forum in June, speakers described “smart” technology as having to be about the people who use it and benefit from it, that is, human-centered design and thinking.
“People, not technology, will create smart cities,” said Colorado’s Chief Innovation Officer Erik Mitisek.
To find out more and get involved in the Colorado Smart Cities Alliance, visit http://coloradosmart.city/
For more about the recent forum and DesignThinkingDenver, read http://www.cobizmag.com/Trends/Smart-Cities-Arent/ and http://www.cobizmag.com/Trends/Denver-Digs-Deep-on-Smart-City-Development-and-Implementation/
Home sales in Boulder-area single-family and attached housing markets rose in August along with the late summer heat index.
Single-family home sales increased 10 percent in August 2018 compared to July with 460 homes sold in Boulder-area markets vs. 418. Sales for condominiums and townhomes climbed 15 percent with 146 units sold vs. 127.
Meanwhile, Denver-metro home sales went in the opposite direction, slowing significantly over the same period, according to the Denver Post.
It’s testament to the state of Boulder Valley real estate market, according to Ken Hotard, senior vice president of public affairs for the Boulder Area Realtor® Association.
“We have our own little market here. While Denver dipped, Boulder Valley showed strong growth in sales, despite ongoing rising prices and inventory squeeze,” says Hotard.
Year-to-date sales also continue to climb steadily. Single-family home sales grew 1.7 percent through August 2018 compared to last year – 3,154 homes sold vs. 3,100. Attached homes followed a similar track, improving 1.6 percent year-to-date – 1,154 sold in 2018 compared with 1,135 in 2017.
Inventory dropped 2.0 percent for single-family homes – 993 units in August 2018 vs. July’s 1,013. But condo/townhomes available for sale grew 11.2 percent with 268 units available in August vs. 241 the previous month.
Hotard attributes the unceasing increase in real estate sales and prices to the area’s strong economy and continued job growth, along with a desirable quality of life. “Significant companies are hiring in Boulder, like Zayo, Google, Twitter – and the natural foods industry is strong,” he adds.
Interest rates are slowly pushing upward, which traditionally results in a slowdown in rising home prices and sales. But Boulder Valley’s housing market may not readily respond to interest rate increases.
“It’s unknown what the tipping point is for interest rates affecting our housing market. And with 35 percent of Boulder County homes bought with cash, rising interest rates may not have a significant effect locally,” says Hotard.
Looking ahead to the final quarter of the year, Hotard expects sales to continue to match those of last year, unless “something unusual happens.”
“We seem to be operating on an upward trend and it’s hard to see what would stop it. The real challenge for Boulder County is providing the housing and transportation infrastructure to support job growth.”
The usual story of ever-rising Boulder rents took a new turn this month. Data for August 2018 shows Boulder rents fell slightly by 0.1 percent last month and by 0.1 percent year-over-year, according to the latest report from rental site Apartment List.
That translates into median apartment rent of $1,150 for a one-bedroom and $1,410 for two-bedrooms. But even with the minor dip, Boulder’s median two-bedroom rent is above the national average of $1,180.
Nationwide rental rates went up about 1.5 percent, which the report found is down from a high of 3.6 percent in 2015.
Compared to the state and nation, Boulder’s rental price growth is below average. The city lags the state average of 0.4 percent rent growth year-over-year.
Rent also decreased in Colorado’s City of Aurora with a reduction of 0.8 percent year-over-year. A two-bedroom apartment in Aurora rents for $1,560.
But statewide, rental prices continue to trend upward. Colorado’s rental prices rose 0.4 percent over the past year. Eight of Colorado’s ten largest cities show rising rents.
Loveland, Thornton, and Westminster all have year-over-year growth above the state average with rent increases of 2.8 percent, 2.6 percent, and 1.9 percent, respectively.
Thornton is the most expensive of all Colorado’s major cities with a median two-bedroom rent of $1,860.
Many cities nationwide saw increases, including Phoenix, Atlanta, and San Francisco, rising 2.5, 1.5 and 1.1 percent, respectively.
Orlando has the fastest rent growth in the nation with an increase of 5.3 percent over last year. Second in the nation is Riverside, CA with 4.1 percent year-over-year growth, followed in third place by Anaheim at 3.6 percent.
The state of Nevada leads the country for the fastest rent growth at 3 percent, followed by Arizona at 2.2 percent.
Apartment List determines rent standings using reliable median rent statistics from the Census Bureau and extrapolates forward to the current month using a growth rate calculated from Apartment List listing data.
You can read the full report at https://www.apartmentlist.com/co/boulder#rent-report, see the national rental statistics at https://www.apartmentlist.com/rentonomics/national-rent-data/. If you want to know where rents are growing fastest, visit https://www.apartmentlist.com/rentonomics/rents-growing-fastest/.