Boulder Colorado Housing Affordability is not the national average!
The National Association of Realtors defines housing affordability as this:
“The Housing Affordability Index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national level based on the most recent price and income data.”
And according to this chart, the US is in good shape. Nationally, it appears housing is affordable, despite the rapid appreciation that many areas have seen. We have low unemployment and historically low interest rates and that is all well and good for MOST people.
But lets take a look closer to home: What about the Boulder Colorado housing affordability picture?
Real Median Household Income for Boulder Colorado
2015 1 Year Change 3 Year Change
US $55,775 +3.83% +5.17%
Colorado $63,909 +4.13% +9.06%
Boulder $72,009 +0.54% +4.13%
From 2014 to 2015 the median sales price of a house in Boulder went up 16.1%. The median sales price of a condo/townhouse in Boulder went up 14.6%.
In short, Boulder Colorado housing affordability went down. It pushed people to buy outside of Boulder, in Lafayette, Erie, Longmont etc. This pushed up demand and therefore prices in these areas too.
Lesson 1: This area is not getting more affordable and that is not going to change in a hurry. As Confucius says “When is the best time to plant a tree? 20 years ago. When is the second best time? Now.” Look lively, home buyers. It’s difficult now, but might you look back a year from now and wish you had taken the plunge a year ago?
Lesson 2: Investors… your time is also good. With so many people being priced out or afraid to commit to large purchases, you have well qualified and great tenants looking for NICE homes to rent and you have tax breaks, appreciation etc to help you increase your net worth through real estate investing. Yep, cash flow or cap rate may not be exactly what you are hoping for right now, but long term, you are going to get all your needs met.
Lesson 3: Sellers. Yes, it’s still a sellers market and this year is still a good time to sell. Are you worried that we haven’t hit “the peak” yet and you should hold on a bit longer? Then remember this: You will only see the peak in the rear view mirror. Ask yourself this: Where are you going when you sell? Need to buy? Want to hit the peak for that too? And final word of advice: You need to have a PLAN before you list your property for sale. Whether that is a double move, short term or long term rental, 1031 tax deferred exchange or another replacement property, it pays to think it through before listing a listing agreement and throwing open the door to a whirlwind weekend of showings. Strategy, then execution!