Tag Archives: Boulder County Real Estate Market

Boulder County Real Estate CEO Roundtable With Stephanie Iannone

Boulder home market ‘healthier’ as appreciation rate declines

Courtesy of BizWest Media

BOULDER — The rate at which single-family homes appreciate in Boulder is slowing down, and more homes are becoming available on the market, pointing to a “healthier” residential market in the city by the Flatirons.

DB Wilson, broker associate with Re/Max of Boulder, said the rate at which home prices have appreciated has dropped from 14 percent a year ago to between 5 percent and 6 percent now.

“That’s healthier,” he said, but added that there isn’t much available for sale below $550,000 in Boulder.

“We’ve lost the low end,” he said during BizWest’s CEO Roundtable on real estate and construction held Tuesday at the offices of Berg Hill Greenleaf & Ruscitti LLP.

He said the number of home sales are up, the time on the market is shorter, and the market still favors sellers, pointing out there is about 3½ months of inventory, still below the ideal six months of inventory.

Wilson said home prices historically appreciate steeply in four-year cycles.

“We are in the last year of a four-year period,” he said. “But I don’t expect prices to go down … they will likely level off.”

The median home price in Boulder exceeded $1 million in May, and was in the high $900,000s in June.

Stephanie Iannone, owner and managing broker of Housing Helpers, said the number of offers a seller may expect is declining.

“Higher prices are making it harder to qualify for a mortgage,” Iannone said. “Only 26 percent of the inventory is below $400,000 in Boulder County.”

David Sinkey, president and CEO of homebuilder Boulder Creek Neighborhoods, has found his sweet spot — building ranch-style homes for empty nesters in the $300,000 to $400,000 range.

“We can’t build enough product,” he said. But he is also finding success in building and selling homes for active adults that command $900,000 to $1.2 million.

Sinkey agreed with Wilson that there is no good answer for dealing with affordability.

Cost of construction, rising taxes

The problem facing homebuilders — and commercial developers — is the rising cost of construction.

In the commercial sector, it is affecting lease rates for tenant finishes of commercial and industrial buildings, as are increasing property taxes driven higher by assessed building valuations.

Jorge Espinoza, broker associate and principal at The Colorado Group, said several factors are affecting the increasing cost of making improvements for tenants tenant finishes made by landlords — lack of skilled labor, increased material costs and the city of Boulder’s new energy code. The code, Espinoza said, requires landlords to bring an entire building to the new code when the project reaches a certain percentage of a building’s assessed value.

Some of these improvements are not being done if tenants aren’t willing to absorb the added cost in the lease.

“It’s creating a big struggle in negotiating, Espinoza said. “It all depends on what the landlord is willing to do — sometimes, it’s take it or leave it.”

Lynda Gibbons, CEO of Gibbons-White Inc., said those taxes can reach $5 per square foot, and the city’s parking requirements for a new project can add $2 to $3 per square foot to a lease.

Gibbons, who was an investor in and handles leasing for Pearl West, a mixed-use development in downtown Boulder, said the city’s push to “make (industrial) parks more fun” by incorporating more amenities in the parks such as restaurants, coffee shops and places for social meetups is “weakening the core.”

Becky Gamble, CEO of Dean Callan & Co., said park owners have benefitted from this. “That’s where smaller companies can go when they can’t afford to be downtown anymore.”

Jeff Wingert, president and chief operating officer of W.W. Reynolds Cos., said subleasing office and industrial space has been in a slowdown mode for at least a year, but sees signs of life.

“East of 28th Street, there has been a fair amount of activity picking up the last two to three months,” Wingert said.

Developing industrial buildings on speculation is paying off for most right now.

Developers are leasing-out spec buildings before they can complete them in the Colorado Technology Center in Louisville.  Andrew Freeman, principal of Freeman Capital Management, said he expects the park to be built-out in the next couple of years.

Keith Burden, principal and managing broker of Burden Inc., said his company’s new light-industrial building in Gunbarrel designed for smaller companies leased out quickly, adding that lease rates for industrial space has hit a new high.

Chris Jensen, principal of Vista Commercial Advisors Inc., said not all builders can gain the financing needed because of increased building costs.

“Lenders and builders are having a harder time agreeing on projects,” Jensen said. “Cost of construction along with increased cost of building permits in many cities, as high as $50,000 per house, creates a challenge. … It’s blowing up deals.”

Sinkey added that new codes requiring fire-suppression systems can cost $10,000. “I don’t see that coming down,” he said.

Reshaping the shopping center

The type of brick and mortar retail businesses in shopping centers is making a monumental shift, moving from soft and hard goods to food and entertainment venues.

“Food is the new anchor category,” said Allen Ginsborg, managing director and principal at NewMark Merrill Mountain States, the group that converted the enclosed Twin Peaks Mall into The Village at the Peaks, an open-air center that is predominantly made up of eateries and entertainment.

Another prime example is the Village at Burlington shopping center in Longmont. At one time, its two anchor tenants were an Office Depot and a Sports Authority sporting-goods store.

It now has as anchors, The Wild Game, an entertainment center that includes bowling, a bar, arcade and live music space, and The Jump Craze, an indoor trampoline park that will open in mid-August, said Burden, who owns and manages the Village at Burlington.

While Ginsborg said retailers are in a state of reconsolidation,  Stephen Tebo, founder and owner of Tebo Development, hasn’t had a problem keeping his retail properties totaling 350,000 square feet leased. He said he has only two spaces vacant, one of 1,400 square feet and another of 1,700 square feet.

“There isn’t a lot of retail being built,” Tebo said. “There has been turnover of prime spaces. We had five open up within two blocks of each other, but we were able to fill them fairly quickly.”

Participants

Keith Burden, principal/managing broker, Burden Inc.; Jorge Espinoza, broker associate/principal, The Colorado Group; Andrew Freeman, principal, Freeman Capital Management; Becky Gamble, CEO, Dean Callan & Co.; Lynda Gibbons, CEO, Gibbons-White Inc.; Allen Ginsborg, managing director/principal, NewMark Merrill Mountain States; Stephanie Iannone, owner/managing broker, Housing Helpers; Chris Jensen, principal, Vista Commercial Advisors Inc.; David Sinkey, president/CEO, Boulder Creek Neighborhoods; Stephen Tebo, founder/owner, Tebo Development Co.; DB Wilson, broker associate, Re/Max of Boulder; Jeff Wingert, president/COO, W.W. Reynolds Cos. Moderator: Christopher Wood. Sponsors: Justin Dodge and Liz Castro, EKS&H; George Berg, Becky Rigo and Peter Schaub, Berg Hill Greenleaf Ruscitti.

 

Boulder County Real Estate

Millennial Impact on the Real Estate Market

As the years pass a new generation of home buyers rise. Yes, members of the millennial generation have been buying houses for several years now, but now the vast majority of the generation has hit their 20’s, and so the number of home buyers will increase dramatically.

Lucy Mueller shares the words of Nela Richardson, the chief economist for Redfin, in her article “Why Millennials Are Better At Home Buying Than You”:

“Millennials will have a huge impact on the housing market for the next decade, just because of demographics alone. So whatever a few of them do, there’s enough of them that they’ll make a big impact.”

With this rising generation of home buyers, a change in the home buying dynamics is inevitable. This includes the relationship between buyers and their real estate agents and realtors.

Generation of the Techies

The millennial generation is technologically savvy and it shows in their house buying. This generation prefers text messaging and emails to phone calls and face to face interactions, and considers the internet an all-knowing source. This generation of buyers will undoubtedly do the bulk of their shopping via online Realtor websites, perusing inside and outside photos before ever setting up an appointment with an agent to see the house.

Generation of the Housing Crash

This generation also watched the housing market crash and the economy fall. A trust has been lost or at the very least shaken, particularly with financial lending institutions. Alan J. Heavens shares in his article “On the House: Millennial buyers are few, dependent on Realtors”:

ClosingCorp of San Diego, which provides residential real estate closing-cost data and technology for the mortgage and real estate services industries, found in a survey that two-thirds of the 1,000 millennials it surveyed were unaware that closing costs were involved in buying a house. If a millennial does know anything about closing costs, he or she finds out by talking to a real estate agent rather than a lender, the survey showed.

The millennial generation is looking more to real estate agents and realtors than previous generations for knowledge of the ins and outs of house buying.

The next decade will see what other changes may take place as the millennial’s flood the housing market with buying their first and second home

Real Estate Agents          Homes For Sale in Colorado

Boulder County Real Estate Market Update

Boulder County real estate is booming.   For top real estate agents in Boulder County that might even be an understatement as buyers are lining up outside in a snow storm for first shot at a  new listing.

That’s right, people are actually lining up to buy homes in Boulder County, Colorado. Even an active snowfall doesn’t keep people from flocking to attend open house showings, according to a March report in the Longmont (CO) Times Call.

Amy Drost, Boulder County real estate agent with Housing Helpers of Colorado says the “Boulder County real estate market is extremely competitive” with some homes in good neighborhoods receiving more than 20 or even 30 offers within the first day of active listing.  .

Lisa Wade, president of the Boulder Area Realtor Association calls the current real estate situation in the county a “feeding frenzy.” The number of homes for sale hasn’t been this low for over a decade. As a result, the homes that do go on the market in the county spark fierce bidding battles that soar too high for some prospective buyers.

The county is almost built-out and Boulder itself may enact development restrictions. Eventually no more single-family detached homes will be constructed. This fuels the shortage.

Most of the new development activity now is in the area of multifamily housing. But newly constructed dwellings, particularly those available for sale, aren’t nearly adequate to satisfy the demand. And demand doesn’t appear likely to decline anytime soon.

Population, employment and average wages are growing, yet home ownership rates have dropped to under 45 percent, down nearly 30 percentage points from the early 2000s, according to a local mortgage lender.

The real estate situation in the Denver region bodes well for sellers, many of whom are receiving multiple bids when their homes go on the market. The tight market pushes realtors out their doors quickly to snap up listings as soon as they become available.

The numbers of Boulder County single-family homes for sale have declined in recent years. January 2015 saw 543 single-family homes listed, down from 641 in January 2014 and 787 in 2013. This represents a significant drop from the 1,461 single-family homes listed in Boulder County in 2010.

So prices are rising in keeping with the limited availability of single-family homes.  The 2014 price of a single-family home in Boulder County rose 3.6 percent from the previous year with a median price ringing in at $427,000.

Whether you’re considering buying a home in Boulder County or already own a home in Boulder County we look forward to being here to help you navigate the Boulder County Real Estate Market.

Boulder County Real Estate Agents

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