As I watch the Boulder County housing market ignite, a small voice says, “You have seen this movie before….”
In 1990, first child born, living on a busy Table Mesa corner west of Viele Lake, we needed a new house. And so we began to drive, my MLS book the size of the Manhattan phone book, the “sold book” a slim little thing with only the best stuff in it. Fine Realtor that I was, it took me a year to realize that we would buy what my wife wanted. Our child’s first complete sentence: “Daddy take me home.” Each weekend it was obvious that we had fewer new listings to look at. Our house had been worth $105,000 since the wheels feel off in 1983; but during 1990 a sign went up near us at $107,500, and down fast at full price; then $109,000, and on.
Then as now:
1. The rental vacancy rate in Boulder crested at 17% in 1989, and fell to 5% in 1990. This time we peaked at 12% in 2003, fell to 7%, and then re-peaked at 9% after Lehman. Now back under 5% for the first time since 1990.
2. More people moved out of Colorado than in from 1984-1990; in-migration resumed in 1991. Migration to Colorado slowed after the technology bust in 2002, but from 2000-2012, our population has grown from 4.1 million to almost 5 million.
3. As ’90-’91, the listing inventory 2011-’12 has dropped 40%.
4. We were the foreclosure capital of the US by the late ’80s, just as in 2004. We had worked off the supply by 1990 (quickly, with enlightened policies and credit). Today, Colorado has the 6th lowest mortgage-delinquency rate in the US.
5. New construction stopped dead in 1985, just as in 2007.
6. Rents began to rise in ’90, just as in 2011, encouraging renters to buy. In 1990 sales of starter condos began to rise with rents; I don’t see that yet, perhaps because the same converted condos are not aging very well.
7. In 1990 price increases began in South Boulder, just as now. We bought our new East Boulder house in the spring of 1991, and paid the owner less than she had paid the builder in 1986. Meanwhile we sold ours for $123,500 (not the best decision I ever made, but we needed to roll the equity). Not until mid-1991 did prices began to run north of Arapahoe, and in the County. Patience, now… patience.
From 1991-1994, Boulder prices rose 60%, and the County as a whole 40%. We will not have a run like that this time: jobs are too weak, and incomes have not grown as much. Half that? Maybe. But no mistake whatever about ignition.
Lou’s opinions are occasionally featured in national media such as The Wall Street Journal and The New York Times, as well as local outlets like The Denver Post and Boulder’s Daily Camera.
Lou is a mortgage banker with Premier Mortgage Group, in the trade for 25 years. In the ‘80s he was a bond-market investment banker, also working with regulators in the S&L meltdown. His checkered career in Boulder has included five years as president of Spruce Real Estate (’78-’83), and marketing manager of Holubar Mountaineering (’73-’78). He is the author of the nationally syndicated weekly “Mortgage Credit News” found at www.pmglending.com/loubarnes/ , together with a resume complete with confessions.
LOU BARNES Mortgage Banker I (303) 302-3837 I firstname.lastname@example.org
Additional Local Statistics:
• Condos in Boulder priced below $500K – 32% Under Contract
• Condos in Denver priced below $500K – 23% Under Contract
• Condos in Boulder priced above $500K and $750K – 23% Under Contract
• Condos in Denver priced above $500K and $750K – 29% Under Contract
• SF homes in Boulder priced below $500K – 57% Under Contract
• SF homes in Denver priced below $500K – 50% Under Contract
• SF homes in Boulder priced between $500K and $750K – 42% Under Contract
• SF homes in Denver priced between $500K and $750K – 27% Under Contract
Information Provided by IRES, Information and Real Estate Services and Metrolist. All reported sales were not necessarily listed or sold by Four Star Realty and Property Management, Inc. and are intended only to show trends in the area.