Boulder Real Estate Market Prices, Trends, and Forecast 2023

Boulder has been a hot market for real estate in the last few years, with an estimated 143,000 homes (attached and detached) in the area with a median value of $575,000. Due to the nationwide rise in interest rates and cooling home prices, the market appears to be achieving balance for both buyers and sellers. So, what is in store for the rest of 2023? And is this year a good time to buy if you are looking to own a home in the Boulder area?

The city of Boulder is a center for culture and art and has long been recognized as one of the best places to live in Colorado. Like the rest of the country, the housing supply crisis has affected residents of Boulder and kept real estate prices high. This is good news for sellers as they are getting top prices on houses sold in the area. On the other hand, buyers have been scrambling to purchase what homes are available. Of course, this high-demand, low-supply scheme has made owning a home in Boulder a highly desirable but costly endeavor.

Despite the relatively high cost of properties in Boulder, residents should be pleased to know that property values continue to rise, which means their investments are predicted to grow over the coming years. The one-year appreciation rate for homes is as high as 17%, which is higher than the national average of 14%. 

In the county of Boulder, average prices in 2022 peaked at $1.1 million compared to $468,000 from 10 years ago. It is no surprise to residents and investors that Boulder has historically been a great market for real estate.

The current thirty-year mortgage rate for Colorado is 6.84%, which is not expected to change much for the remainder of 2023. The market in Colorado did start to slow down at the end of last year. Prices peaked back in April 2022 and have been down-trending ever since. Since April 2022, median sales prices have decreased month over month from an average of $596,000 to $530,000. While it is true that prices are closing for lower than the asking price in most sales, the difference might not be all that significant. Many homes are still closing for 98% of the asking price this year.

First-time buyers may be at a slight disadvantage when purchasing Boulder homes. Colorado is one of the top five most expensive states to purchase a home for first-time buyers. Statistically, this is an improvement over the prior year. To offset this, many first-time buyers use FHA loans with down payments as low as 3.5%.

Another trend in 2023 is that prices are finally starting to fall after two years of steady growth. In January, prices for homes in Colorado were down 1.4%. Houses are sitting on the market longer, but that is more of a return to normal compared to the boom we have seen in recent years. These lower prices aren’t the mark of an impending crash but more of a flattening of the curve. This trend points towards stability in the market, with many economists calling this flat period a time of much-needed rest.

So, what is ahead for the remainder of 2023? One thing that appears to be true is that prices have peaked for the time being. However, the luxury home market might be the one exception to falling prices. For homeowners, this is to be expected as luxury properties tend to hold their value well and appreciate the most over the years.

New home construction is one solution to the low housing inventory that has plagued the market for the last two years. March 2023 saw the highest number of newly constructed homes in Colorado since July of last year. New home construction has a trickle-down effect on the housing supply. Even if new homes are not being built in your desired area, this may incentivize homeowners to move, thus contributing to movement on both ends of the market. Of course, this takes time, and the expectation is for the housing shortage to continue to be an issue, at least for the near future.

If you are investing for the long term, analysts predict the Boulder real estate market will appreciate 25.87% over the next five years. It’s no surprise to homeowners that a long-term investment strategy is the most predictable and profitable. Over time, property values in the Boulder real estate market are almost certain to go up significantly, which could motivate many buyers to invest now rather than later.

What does this mean for homebuyers in Boulder for 2023 and beyond? The market is stabilizing for both buyers and sellers and appears to have achieved balance. Unfortunately, many sellers are still expecting last year's prices, and that is just not going to happen. But buyers can look forward to a more stable market with less competition and prices leveling off. The downside is that the housing inventory is still low, interest rates have risen in the past year, and there appears to be no change in the foreseeable future.

While some experts describe the forecast for 2023 as flat or stuck, this isn’t necessarily a bad thing. A balanced market that doesn’t favor buyers or sellers indicates that a type of equilibrium has been achieved, resulting in the likelihood of greater long-term stability and a crash being unlikely.

Is this a good time to buy a home in Boulder? The answer to this question depends on your situation. There is a slight chance prices will decrease by a small margin by the end of the year. How small?  While closing prices are down month to month, they are still closing within 98% of the asking price. Simply put, that is not enough margin to make a difference for most buyers. So, when it comes to finding the right time to purchase a home, your individual situation should be the determining factor, not the market’s minor fluctuations that are currently being observed.

If you have questions about the Boulder real estate market, or if you are looking at homes in the Boulder area, please consider local agent Nina Mooney.