Even as other Colorado metros are starting to show signs of recovery, market conditions in Boulder remain notably weaker and home prices continue to correct.
Declining prices have blunted investor appetite, and the share of homes sold to investors fell by roughly 50% in the first quarter. The new-home market has fared somewhat better than its resale counterpart as limited existing-home inventory has pushed more buyers to consider new builds that are more readily available.
Builders are continuing to woo buyers with price reductions, incentives, and rate buydowns. As a result, the new-home sales rate has bounced back from recent lows.
Strengths
Colorado's new state law HB23-1255 will ban cities from enforcing explicit growth caps. Boulder's 1% limit allowed for only 400 new units annually with exceptions. Growth limits helped to limit sprawl but drove up home prices.
Weaknesses
The metro area has one of the lowest unemployment rates, but, as the economy faces headwinds, layoffs are picking up and job growth fell below 1%. Boulder software company Bonusly cut staffing in March by 30% just days after raising nearly $19 million in funding.
Supply
Quarterly housing starts decreased 2.8% from a year ago, while the number of available vacant developed lots sits at 1,373, up 4.2% over the same quarter last year. In terms of supply-demand balance, the market area is 2.7% undersupplied.
Sales
New-home sales in the Boulder metropolitan area decreased 44.5% year over year to an annualized rate of 333 units in May. Existing-home closings for the 12 months ending in May posted a year-over-year decline of 33.2% to an annualized rate of 4,303 units.
Economy
Total nonfarm employment in the Boulder metropolitan statistical area increased 1.4% from the same period last year to 206,700 payrolls in April. There were approximately 400 more jobs in April compared with the previous month. The local unemployment rate increased to 2.4% in April compared with 2% in the previous month. April's jobless rate is lower than it was this time last year when it stood at 2.5%. Zonda forecasts the region's unemployment rate will finish the year at 2.5%.
Community
The population of the Boulder metropolitan area is approximately 334,960 people and is projected to increase by 0.9% this year. There are approximately 134,290 households in the region, which is up 1.1% year over year. Forecasts show that current household formation is expected to increase by an annual growth rate of 1.5% for 2028. Incomes increased by 5.2% from the previous year to $97,248.
Did you know you can access free housing data with Zonda's Market Snapshots? Reports include new-home supply and valuation, resale listings, jobs, market forecasts, and more. Get your complimentary market snapshot for your local CBSA today.
