Scott Ptach, Peak to Peak. No one would’ve thought that the Boulder MSA (metropolitan statistical area) would have posted a 70.8 percent increase in housing prices in just the past 6 years! So many factors have played into this, but reasons include net migration, low inventory, low building and a continued change of affluence in our local economy.

Our local mountain market remains strong. Our median sales price increased by a modest 4.9 percent last year from $592,500 to $621,500. The average price increased by substantially more, 23 percent, from $632,256 to $777,800. The biggest reasoning behind this substantial increase was the amount of lower priced sales in 2017. This skewed the average actually resulting in a decrease in the average sales price from 2016 to 2017. As you can see in the graph, without the anomaly in 2017 the average sales price curve is actually maintaining right along with the median sales price curve. If we draw a line from 2016 to 2018 and skip 2017 completely, the curve lines would be virtually parallel.

The one comment I will make to this is the slight decline of the growth curve in the past year. We still had a strong market and good appreciation, but not quite the same growth as years prior. A little fun fact for you is the average sales price in the city of Boulder is typically 3 percent less in the second half of the year than it is in the first half of the year. In 2018 though, the city of Boulder’s average sales price was down 6 percent from the first half of the year to the second half of the year. This shows that downward force on the growth curve. For the past 40 years, Boulder has always been the first city to show a leveling off, with the rest of the cities in Boulder County following.

Even though this is the case, I predict that we will continue to see growth in the mountains. The mountain market has remained so consistent over the past few years.

Look at the consistency in all of the statistics presented in the graph: the number of sales year to year 265, 269, 266; months of inventory 3.1, 2.7, 2.8; under contract percentage 32 percent, 33 percent, and 35 percent. I predict that we will continue to see this consistency in the mountain market.

One of the factors that we thought would have more of a downward pressure on the market were rising interest rates. We have not seen that downward pressure as much as expected. Sure, it is there for the entry level buyer, but in all honesty, the jobs down in Boulder have helped people to continue to be able to afford higher prices. Two income families that might make around $150k a year combined can still, from a lending standpoint, afford a $3,500 a month payment, which buys you some of the highest priced homes in Nederland. Now the Fed has virtually stopped increasing interest rates for the foreseeable future, and we should see a leveling off where we are at. The 4.64 percent interest rate is still great and still below the 40-year average of 6 percent.

From a subjective point of view, we continue to see the demand for housing in the mountains growing. This not only for primary residences, but second homes and cabins as well. There are a decent number of people that live in Boulder who are opting to look for a second home closer to Nederland rather than looking in Summit County. We all know the factors behind this decision.

The biggest problem that we will continue to have is the lack of inventory in the mountains. Unlike down in the flats there isn’t a lot of new building going on and we aren’t meeting the demand for housing. Personally, I think for this reason the mountain market will continue to grow more than the rest of the county. The lack of new home supply will continue to push prices up.

Scott Ptach is a member of The Boulder Property Network and can be reached at 303-441-5611.

(Originally published in the February 7, 2019, print edition of The Mountain-Ear.)