The real estate market in Boulder and Broomfield Counties has taken a serious turn for the better this spring and there is no doubt our property values are increasing. Median home prices in Boulder are up 7%, year over year, and sales volume is up 28% yr over yr. According to data this quarter, Boulder, Lafayette(prices up 17% y o y), Erie(prices up 9% y o y) and Longmont(prices up 2% y o y) all have six months of house inventory or less, while Superior(no change), Louisville(prices up in some neighborhoods 20% y o y) and Broomfield(prices up 6 % y o y) have fewer than four months of inventory.
If you are waiting to purchase a house, now might be a good time to move. Home affordability may not improve, and according to statistics home prices are on the rise and interest rates an all time low. Say you purchase a home for $300,000 and put 20% down. If you take out a 30-year mortgage at 3.75 percent interest (which is commonly available today however todays rates have fallen to 3%), your payment would be $1,111 a month with $361 of that amount going toward principal. You would be paying $750 a month to borrow $240,000 not even considering the deductibility of home mortgage interest. If you’re on the sidelines waiting for prices to go down 10 percent, imagine that $300,000 house can later be bought for $270,000. You put the same $60,000 down on the home, leaving you with a $210,000 mortgage. Let’s say 30-year mortgage rates have increased to 5 percent, still at low levels. Your mortgage payment would be $1,127, with $252 of principal paid down a month. That $210,000 mortgage would cost you $875 a month. The point is that 3.75 percent interest for a 30-year fixed mortgage presents us with a tremendous opportunity for those with long-term horizons. Buyers purchasing investment property are making wise financial decisions. Warren Buffett knows that the simple maths of more households being formed than houses being built is good news for housing-related investments.
For sellers in healthy markets, it’s not too late to list your home. If you’ve been thinking about selling your home, consider listing it now. Sellers now have the advantage of a buyer pool that can afford to pay more with historically low interest rates. If interest rates even tick up to 5 percent, the number of prospective buyers of your home would shrink significantly. With most Boulder County cities having healthy or low levels of inventory, buyers will be motivated to bid on a well-priced home.
Data collected from David Gardner, Boulder Camera and BARA and Trulia
