Boulder Colorado Experiencing Strong Home Double Digit Appreciation
The market continues to perform really nicely. We are seeing strong appreciation. My real estate practice is devoted to assisting home buyers and home sellers just like you to achieve the best possible results.
This means going above and beyond even in a strong Seller’s market to ensure you receive the very highest sales price when listing your home with me.
External Factors Driving Double Digit Inventory
There just are not enough homes for sale. This is the biggie driving the red hot real estate market in Boulder County. Compared to say just after the great recession, we are seeing over forty percent fewer homes for sale. That’s a sizeable shift.
And it only tells a fraction of the story. Because pre-Great Recession, we had tremendously more homes for sale. The fact is, these days there is just so little inventory out there.
Downsides to Double Digit Appreciation
Affordability of Boulder County
With home values climbing rapidly, it makes living in the area much more expensive. Now, as a home owner, you might initially think this is all great news. But there are a few points where this becomes unpleasant. For instance.
Let’s say you have adult children. You want them to stay, to live close to you. But with the crazy appreciation, it can be difficult for our kids to live near us. They wind up moving a city over. Or a county away. Double digit appreciation is not always the most welcome news.
No kids? What about yourself? Let’s say you want to make a change in your home. When you go to sell, sure you get a big boost to your bottom line. But your replacement home will have that same leap in value. The average sell-buy transaction results in a forty percent hop in sales price. That sort of home upgrade might become out of reach with quickly escalating home values.
When this happens, a lot of would-be sellers don’t sell. Guess what? This means lower inventory and higher prices.
Boulder Homes Not Immune To Inflation
When it becomes more expensive to purchase stuff, inflation, can be an issue impacting everyone’s quality of line. That double digit appreciation in Boulder trickles down. It causes homes regionally to become more expensive. Folks can’t buy in downtown Boulder, so they are looking for something nearby.
Nearby can be a vague term. One day it might mean Gunbarrel, the next it could be Erie. Inflation is a negative impact where everything is becoming more expensive, especially made worse by the lack of the thing wanted in the first place. With house inventory down and prices jumping due to the double digit appreciation, it’s no surprise we are seeing regional housing inflation impacting our community.
Decreased Mobility For Boulder Home Owners
I touched on this already. But the bottom line is that while your house might be skyrocketing in value, is your income also increasing rapidly? Consider this. A decade ago, you purchased a Boulder home for sale. You put twenty percent down and took advantage of low interest rates the last several years to refinance.
To make a move today, you have to overcome several factors.
- Interest rates are about double. It will cost you more money for your mortgage.
- The double digit appreciation of home prices makes your trade up target price considerably higher.
- The lack of inventory creates stress — do you sell first? then buy? You could be “homeless.” Or can you afford to buy first then, sell? What happens if the market shifts again, can you afford two mortgages?
And Then There Are Tax Consequences For Boulder Homes
Some of that double digit home appreciation is taking place on investment properties. When you go to finally cash out that investment, you’ll have that first world problem. Higher return on your investment, means higher taxes. Be sure to consult your preferred CPA/tax accountant when selling your home.