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Boulder County December 2016 Update

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Overview

Boulder County is part of the seven-county Denver Metropolitan Area. Boulder County is an ecologically diverse county with arid plains, foothills and mountainous terrain, providing good access to the state’s many natural recreational amenities for local residents and tourists. The area’s early settlement and development utilized the plains setting for agriculture and ranching as well as the mountains for mining and prospecting. The major cities in Boulder County are Boulder (county seat), Superior, Louisville, Lafayette Longmont and Erie (the last two partly in Weld County).  Boulder is home to the University of Colorado founded in 1876 as Colorado’s first university and is a large influence on the county’s economy. Boulder County’s economy include such industries as aerospace, bioscience, data storage, natural and organic products, outdoor recreation, renewable energy, software and tourism.

Transportation

Boulder County is approximately 25 miles from Denver. The major transportation route into Boulder County from Denver is Highway 36 also known as the Boulder Turnpike. The Boulder Turnpike was originally a toll road from its opening in 1952 until 1967. Highway 36 continues north through the City of Boulder to Lyons. Another major thoroughfare following the foothills from Golden to Boulder is Highway 93. There have been suggestions to expand E470 into Boulder County to Jefferson County, completing the Metropolitan Denver 470 Interstate loop, but concerns have been raised from citizens in Boulder County and Jefferson County about traffic and funding. State highway 287 runs north/south and connects Highway 36 in Broomfield (Broomfield County) with Lafayette and Longmont in the northeast portion of Boulder County. The primary east/west routes within Boulder County are Highway 7, Highway 52 and Highway 66. The Diagonal Highway (Highway 119) is the main thoroughfare between north Boulder, Gunbarrel and Longmont.

Economic Indicators

The following is from the September 2016 (the most recent available) Economic Indicators Report published by the Boulder Economic Council, and the October 2016 labor market indicators from the Colorado Department of Labor.  For statistical purposes, Colorado Department of Labor reports relied upon the Boulder-Longmont Metropolitan Statistical Area (MSA) for reporting.

Employment

Boulder County’s unemployment rate in October 2016 was recorded as 2.4 percent. The unemployment rate in Boulder is down 0.5 percent over the prior month, and at its lowest level since December of 2000. There are currently 8,669 jobs available in the Boulder-Longmont MSA job market, and unemployment in the Boulder market is consistently below Colorado’s overall unemployment rate.

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The largest employment sectors in the Boulder-Longmont MSA include Government (Federal, State and Local) of 20.29 percent, Professional and Business Services of 18.01 percent, and Educational and Health Services of 13.0 percent.

Below are the top 10 industries by projected growth for the Boulder-Longmont MSA for the 2015 – 2025 time period

industries

Total Boulder employment increased by 1.67 percent month-over-month in September 2016.   Total employment in Boulder expanded by 4,784  jobs, or 2.76 percent, year-over-year in September 2016.

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Business Confidence

The Leeds Business Confidence Index, based on Colorado business leaders’ expectations, dropped slightly from 55.4 in the second quarter of 2016 to 54.6 anticipated for the third quarter of 2016, still indicating positive expectations. The Leeds Business Confidence Index has been above 50 since 1 Q 2012. 

Venture Capital Investment

In 1 Q and 2 Q 2016, Boulder companies received $29.5 million in venture capital investment, representing approximately 24 percent of all investment in Colorado.  Since 1 Q 2014, Boulder companies have received $504 million in venture capital investment, representing approximately 30 percent of all Colorado venture capital investments.

Residential Real Estate

The number of single-family homes sold year-to-date in Boulder was down 11.6 percent over the same period in 2015; however, the median single-family home price was up 14.67 percent over the same time last year, and 31 percent since 2014.

In the residential rental market, apartment vacancies were 5.9 percent for Boulder and Broomfield Counties in 2 Q 2016, compared to 6.6 percent in the previous quarter.

Commercial Real Estate

Commercial vacancy rates have been in the single digits in Boulder Colorado since 1 Q 2013. Office vacancies have increased slightly from 4.3 percent vacancy in 2 Q 2015 to 6.4 percent in 2 Q 2016. In the same time, industrial vacancy has gone from 2.6 percent to 3.9 percent.  These increases are partially due to new inventory on the market.  Retail vacancies have lowered 218 percent to 1.7 percent in 2 Q 2016.

Gross Domestic Product

According to the Bureau of Economic Analysis, the nominal gross domestic product (GDP) for Boulder County was an estimated $23.4 billion in 2015. GDP grew 5.3 percent between 2014 and 2015.

Boulder Colorado MSA GDP by year (2001 – 2015) 

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Retail Sales Tax Collection – City of Boulder

Retail sales, reflected by the city sales tax collections, have continued to increase after slipping in 2008 and 2009. Much of the increase in retail sales in 2007 can be attributed to the opening of the Twenty Ninth Street Shopping District in late 2006.

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Tourism

Boulder is a popular destination for local and out of state visitors, and tourism is a significant contributor to the Boulder economy. Despite its location at the foot of the mountains, Boulder has an urban feel and offers an impressive variety of art, cultural, and entertainment choices that set it apart from most cities its size. Boulder has more than 30 art galleries and has been recognized as one of the nation’s top cities for art. Boulder is home to five local museums, 32 movie and stage theaters, a resident symphony, and offers a notable number and variety of cultural events. The city’s dining and craft brewing scenes have exploded and Boulder is now a nationally recognized dining destination. Boulder’s commitment to supporting small, unique merchants as well as national retailers has helped create an appealing array of shopping choices.

Tourism in Boulder is supported by the presence of the University of Colorado as well as the city’s surroundings and amenities. The area offers scenic beauty, great weather, and abundant recreational opportunities. Boulder is surrounded by over 45,000 acres of open space and has over 150 miles of public hiking and biking trails including the Boulder Creek Path, a trail featuring pedestrian and bicycle lanes that runs through the middle of town. Boulder Canyon is only a 10‐minute drive from downtown Boulder; Eldora Mountain Resort, Eldorado Canyon State Park, and Rocky Mountain National Park are less than an hour away. Each year, the city hosts one of the nation’s largest 10k races, the Bolder Boulder. In 2015 Boulder hosted one leg of the IRONMAN circuit and a Republican debate which took place in the University of Colorado’s Coors event center.

Hotel occupancy rates, average daily room rates, and average revenue per available room, as well as sales tax receipts for select categories and shopping areas provide further insight into the city’s tourism activity. Average hotel occupancy rates in the city have been improving and remain consistently higher than state and national averages for cities with similar characteristics.  Average daily rates in the city are lower than the Colorado ski average and higher than the national average for cities with similar characteristics to Boulder.

Demographics

The following are 2016 and 2021 estimates for Boulder County and were provided by the CCIM/STDB (from December 2016, the most recent available):  

Population

In the identified area, the current year population is 316,987. In 2010, the Census count in the area was 294,567. The rate of change since 2010 was 1.18 percent annually. The five-year projection for the population in the area is 338,316 representing a change of 1.31 percent annually from 2016 to 2021. Currently, the population is 50.2 percent male and 49.8 percent female.

Households

The household count in this area has changed from 119,300 in 2010 to 127,213 in the current year, a change of 1.03 percent annually. The five- year projection of households is 135,615, a change of 1.29 percent annually from the current year total. Average household size is currently 2.41, compared to 2.39 in the year 2010. The number of families in the current year is 73,270 in the specified area.

Housing

Currently, 56.4 percent of the 135,006 housing units in the area are owner occupied; 37.9 percent renter occupied; and 5.8 percent are vacant. Currently, in the U.S., 55.4 percent of the housing units in the area are owner occupied; 32.9 percent are renter occupied; and 11.7 percent are vacant. In 2010, there were 127,071 housing units in the area – 59.0 percent owner occupied, 34.9 percent renter occupied, and 6.1 percent vacant. The annual rate of change in housing units since 2010 is 2.73 percent. Median home value in the area is $423,986, compared to a median home value of $198,891 for the U.S. In five years, median value is projected to change by 1.25 percent annually to $451,082.

Income

Current median household income is $69,924 in the area, compared to $54,149 for all U.S. households. Median household income is projected to be $80,516 in five years, compared to $59,476 for all U.S. households. Current average household income is $99,491 in this area, compared to $77,008 for all U.S. households. Average household income is projected to be $109,042 in five years, compared to $84,021 for all U.S. households. Current per capita income is $40,436 in the area, compared to the U.S. per capita income of $29,472. The per capita income is projected to be $44,186 in five years, compared to $32,025 for all U.S. household.

Conclusion

Boulder County’s economy is strong, and continues to outpace Colorado overall in terms of unemployment.  The strength of Boulder’s economy is further evidenced by a high percentage of venture capital investment relative to the state of Colorado overall, and continued GDP growth year over year.  Housing continues to be strong, with low rental vacancy rates, and a 31 percent increase in the price of single-family housing since 2014. Boulder’s economic strength is also reflected through commercial real estate with office, industrial and retail vacancies all below 4.5 percent.

Given almost all economic indicators researched appear to be strong, it is anticipated that economic strength will continue into the near future.

 

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How to Find the Home That’s Right for You

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For the majority of homebuyers, finding the right property to buy is often the most difficult step of the home buying process—more difficult than saving for a down payment or getting a mortgage.(1) Before you start your search, consider these four important factors.

1. How much house can you afford? Knowing what you can afford will help you narrow your search to homes within your budget. The basic rule of thumb is that no more than 28% of your gross annual income should be applied to your mortgage, insurance and property taxes.

• Get pre-approved for a mortgage to help you define your price range.

• Make a list of expenses you’ll have when you become a homeowner, including homeowners’ association fees,

property taxes and private mortgage insurance.

• Factor in costs associated with continued upkeep and maintenance.

Looking for a quick estimate based on your finances? Visit Bankrate.com and use their “How Much Can I Afford”

calculator.

2. What type of home do you want? What features make up the ideal home for you and your family? How many bedrooms and bathrooms should it have? Do you want a pool? Do you want a detached home with a big yard or a condo with a patio? Conversely, what features would eliminate a home from your list of prospects? Knowing what you want, and don’t want, will help you focus your search on homes that fit your needs.

Top Reasons for Purchasing a Home (1)

1. Desire to own a home of their own

2. Desire for a larger home

3. Job-related relocation or move

4. Change in family situation

5. Desire to be closer to family/friends/relatives

 

The average home purchased in 2015 was a

detached, single-family, 2,000-square-foot home

with three bedrooms and two bathrooms. (1)

 

3. Location, location, location! Choosing real estate is more than whether you want to live in the city, in the suburbs or away from it all in a rural area. Your neighborhood matters. In fact, 59% of recent buyers said the quality of the neighborhood was the top factor influencing where they lived. (1) Whether you want a house in a great school district or one that’s convenient to health facilities, defining the qualities of your ideal neighborhood will help you narrow your search area.

Top 5 Factors Influencing Neighborhood Choice (1)

1. Quality of the neighborhood

2. Convenient to job

3. Overall affordability of homes

4. Convenient to friends/family

5. Design of neighborhood

 

4. What’s your lifestyle? Single homebuyers may have different needs than married buyers, or buyers with children, and all of these groups have different needs than retirees looking to downsize. What about you? Are you single and want to live in the heart of a busy urban area? Do you have one or more children and want to live in a family-oriented subdivision with a pool and recreation center? Perhaps you want your children to grow up near cultural amenities only found in urban areas. Your current stage of life, as well as your desired lifestyle, often influences the types of areas and neighborhoods that appeal to you. Once you determine your priorities, you can focus your home search to only those that match your desires.

 

Are you ready to start your home search? Let’s discuss it! Once you’ve defined what the right home looks like to you, pop into the office or call me and we’ll discuss your options and I’ll give you the scoop on what to expect during the process. Finding the right home can be a difficult process; however, with an experienced professional by your side, you’re sure to make the right decision.

 

Fact: Homeowners lived in their homes for a median of 9 years before selling. However, recent homebuyers say they expect to live in their homes 14 years. (1)

Top 3 Reasons Buyers Chose a Home (2)

1. Size

2. Room layout/design

3. Price (tie)

3. Neighborhood (tie)

Facts and Figures

 

Sources: 1. NAR 2015 Profile of Home Buyers and Sellers

2. NAHB, American Housing Survey 2015, July 1, 2015

 

(C) 2016, Buffini & Co. Reproduced with Permission.

Basic Home Improvements that Save Money

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(C)2016 Reproduced with permission Buffini & Co.

In many areas of the country, energy and water costs are on the rise, taking a bigger chunk out of our wallets every month.

But, there’s hope. With a few home improvements, you may be able to save money on your utility bills.

Water

Whether you live in an area that’s facing another year of drought, or you just want to save money on your water bill, these tips can help you be efficient with your water.

Go low flow.

Showerheads and faucets account for more than 32% of household water use combined. (1) Low flow faucets and showerheads can reduce your water consumption in these areas by as much as 50% and may save up to $145/year on your bill. (2)

Fix leaks.

Leaks comprise 13.7% of household water use. (1) Leaky faucets and pipes increase your water bill and may require expensive repairs if they’re ignored. Every six months, inspect your faucets and pipes for wear and tear. If you notice a leak, fix it right away.

Go tankless.

If it’s time to upgrade your water heater, consider going tankless. A tankless water heater may help you save up to 20% on your water bill. (2) An added bonus: You’ll never run out of hot water again!

Energy

Heating and cooling comprises more than half of the energy used in the average home. (3) Regulate your home’s temperature to save energy, improve comfort and reduce your heating and cooling costs.

Rethink your insulation.

Good insulation not only helps regulate the temperature of your home, it can also reduce your heating and cooling costs by as much as 20%. (3)

Manage the temperature automatically.

Wouldn’t you love to come home to the perfect temperature? A programmable thermostat not only improves your comfort from the second you step foot in your home, it also helps you save energy and money—up to $150 a year. (3)

Seal up drafts.

Have you ever wondered why your home won’t stay warm in the winter or cool in the summer? Check your windows—drafty windows cause 30-40% of heating and cooling losses. Apply weather stripping to your windows to patch up leaks and save more money. (3)

 

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Upgrade Your Kitchen

The kitchen is the heart of the home. A kitchen remodel will not only improve your home’s functionality, it may also become a key selling point if you decide to sell. The average major kitchen remodel costs between $29,400 and $42,400, while the minor kitchen remodels average between $11,700 and $17,800. (4) However, if you’re thinking of listing your home soon and your kitchen is in good shape, you may want to rethink a full remodel. A minor upgrade and a coat of paint may be all you need to freshen up the space.

Upgrade Your Bathroom

The bathroom is the place where you get ready to take on the world every day. Show it some love with a makeover. Upgrade your fixtures to reflect your style, or create the spa-like getaway of your dreams. The average major master bathroom remodel costs between $10,500 and $18,800, while the average minor master bathroom remodel costs between $4,800 and $8,300. (4) Are you thinking of renovating a guest bathroom? Expect to spend somewhere of between $7,200 and $9,500 for a major overhaul, or between $3,200 and $4,400 for a minor remodel. (4)

Improve Energy Efficiency

Is it time to upgrade your appliances, windows and other energy-impacting parts of your house? Upgrading your home with energy-efficient features will not only save you money each month on your utility bill, it may also make the home more attractive to younger or more energy-conscious buyers.

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Sources:
1. Environmental Protection Agency, Water Sense, Water Use Today
2. US News, 8 Energy-Efficient Home Improvements that Save Money, May 31, 2013
3. U.S. Department of Energy, Energy.gov
4. Houzz, Houzz & Home, June 2015

Denver Metro Inventory Down 83% from 2011

According to statistics from REColorado.com, Denver Metro Housing inventory is hovering near five-year lows, down 83% from January 2011. The trend is even more pronounced for homes under $300,000 (a precious market for first time home buyers), where inventory is down 94%.

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What does this mean for the local housing market?  For sellers, expect to continue to see quick sales, with few concessions. And for those homes under $300,000, expect to see continued bidding wars.  The biggest hesitation for sellers? The ability to find a suitable replacement home.  For sellers moving from a sub-$300,000 home to a $300,000 + home, they may still be well-served in this market.  However, there are not many lateral moves available for those that cannot upgrade.

For buyers, getting an offer accepted will continue to be a challenge.  Those asking for concessions may be well served to find their own unlisted inventory.  The days of writing “love-letters” to sellers are over, as sellers may have to contend with a dozen equally lovable buyers.

The biggest winners will be current homeowners that can leverage newfound equity at historic low interest rates via a refinance.

How do you take advantage of this quick moving market? For a no-obligation personal consultation call me today. (303) 578-2329.

 

Housing and the Economy

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(c) 2016. Reproduced With Permission by Buffini & Co.

Buying a home not only impacts the homeowner’s financial situation, it also impacts the local and national economies. Since 2016 is an election year, there’s no doubt the economy and housing’s role within it will be a hot topic in the news. Let’s take a look at the impact of housing on the local economy and on the larger national economy.

Housing’s impact on the local economy

When you buy or sell a home, you not only build your financial portfolio, you benefit your local
economy as well. Typically, there are 26 services involved in a single real estate transaction in the 30 days before and after a real estate transaction has closed. Buyers and sellers may use services such as movers, painters and contractors during and after a transaction has closed. Additionally, buyers may continue to use these services and more while they own the home.
The Impact of New Homes
While the true economic impact of new home building varies by community, the National Association of Home Builders calculated the figures for a typical metro area.
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The Impact of Remodeling
Renovations contribute to the economy through the use of local labor and businesses, as well as permitting and other government-related fees. The National Association of Home Builders also conducted a study on the one-year impacts of residential renovations on the local economy. Spending one million in remodeling generates an estimated $841,000 in private income and an estimated $71,000 in government revenue.* It also creates an average of 11 local jobs.

Housing’s impact on the national economy

A nation’s gross domestic product (GDP) measures the economic performance of the country and is defined as “the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.”
In short, GDP measures how well a country, state or region’s economy is performing. Housing has contributed to more than 15% of GDP for the past 2 years.
According to the NAHB, housing contributes to GDP through residential investment (e.g., home building and remodeling) and housing services (e.g., rent including utilities, the estimated cost of an owner renting their residence and utility payments). It also indirectly impacts consumer spending—when homeowners have more expendable income or increased access to credit, they may buy more goods and use more services, which benefits the overall economy.
Housing comprised 15.45% of the nation’s GDP at this same time last year. Home building and remodeling made up 3.14% of this.
Homeownership Benefits the Community
Homeownership bolsters a community’s treasury through the collection of property taxes. The money collected from property taxes helps support infrastructure, police and fire protection, education and
community programs.
Additionally, studies from the National Association of REALTORS® show that homeownership has many social benefits, including:
• Increased civic participation and charitable activity
• Better health for homeowners
• Less crime
• Higher student test scores and high school graduation rates
• Higher social capital
Sources:
1. NAHB, HousingEconomics.com, September 1, 2015
2. NAHB, Local Impact of Home Building: Updated NAHB Estimates, April 1, 2015
3. Investopedia, http://www.investopedia.com/terms/g/gdp.asp
4. NAHB
5. NAHB Eye on Housing, June 24, 2015

Building Your Mountain Dream Home

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As an agent who has specialized in mountain properties, I often get questions from those wanting to buy land either for a mountain property, or their single family residence in the mountains. Most questions I receive center around the start up costs, and things to consider when buying a mountain property.  This article covers some of the most frequent questions:

What are my lending options 

When selecting a site to purchase, assuming there is not a habitable structure, it will not qualify for FHA or VA lending.  Therefore, you will have to select a conventional loan for land, or a construction loan.  Each of these options call for a larger down payment than FHA or VA financing, a 30% down payment is typical.  Land loans typically have a maximum length of 15 years, and construction loans a shorter term, as well as an adjustable rate, with a balloon payment due at the end of the term.  Therefore, whatever term period you choose, you want to make sure that your construction project will be complete by the end of the term so that you can refinance into a traditional mortgage with more favorable terms.

Infrastructure 

One of the things that a lot of buyers find alluring about the possibility of a mountain home, is the ability to live off the grid.  Options for solar energy have come a long way and Colorado receives sufficient sunlight for this is be a viable option.  However, solar power systems are expensive, and usually require a purchase of a generator for days when weather affects solar availability.  The alternative is to pay for a local energy company to run power to your property.  In either case, plan on spending about $30,000 for the initial setup.

Water and septic are also necessities in building a home.  To drill for a well in Colorado, you need to get a well permit.  Typically it is not an issue to get a well permit for household use only, however, Colorado water rights laws are very intricate, and you will want to make sure that you can get a permit on any land prior to building.  Expect to spend around $15,000 on well costs.  As for septic tanks, they too cost around $15,000.  You will also need to have permits to install a septic tank, as the county where your property is located will want to ensure the septic tank is not polluting any downstream water.

Lastly, there is the question of internet service.  Many people choose to build a mountain property and telecommute.  The most common service provider is HughesNet, which provides satellite internet service.  If you’ve never tried using HughesNet internet service, I would highly recommend finding a property on airbnb.com which offers this service.  Try out the service using the features you think may typically use.  I have personally found the service to be slower than DSL or broadband service, but it may be an acceptable speed depending on your usage.  As a bonus, if you are a night owl, HughesNet speeds improve substantially during the night hours.

Site Viability

In the mountains, an acre of land can have a widely varying value, and that value really depends on site viability for building. Generally speaking, more level fields are better for a wide variety of building, but beyond that, there are other factors to consider.  First of all, if a foundation is to be poured, tests should be done to ensure the foundation dig will not yield an underground spring, or a dig will be stopped by a discovery of hard granite below.  Also, access points from the road have differing degrees of appeal.  While some like the idea of living off a forest service road, that road may not be plowed during the winter.

Building Costs

Once the infrastructure basics are covered, the next step in the process is to begin building.  There are many avenues one can take in selecting the building.  The first being, if you truly want your home to be one of a kind, contract with an architect and general contractor to create plans and specs. The plans are essentially your blueprint of the house, your specs are how the house is to be built with details such as insulation type and fixtures.  This first option is typically the most expensive, and is generally difficult to do for less than $250,000.

The second option is to work with a builder that has predesigned a portfolio of homes.  This is typically cheaper because not only are you taking advantage of economies of scale in the design process, but the builder has already found most of the “gotchas” in building this home previously.  Therefore, estimates tend to not only be cheaper, but more reliable.

The last option is to purchase a modular home and have it installed on the property.  Modular homes have come a long way in terms of style.  No matter what your tastes, there is a modular home builder that has something close to the style you are looking for.  This is usually the cheapest option, but not without risks.  As covered in the site viability section, this option may not be available if the property is in a locale that is difficult for semi trucks to navigate.

Whatever your choices, resale ability is also a key item to consider for down the road, even if the mountains are your final destination.