Compression in the Housing Market

As a super-nerd, I proudly follow micro and macro-economic trends.  Last year, in 2016, I asserted that based on the trends; it was apparent that housing prices would stabilize late 2016 and start to drop in early-mid 2017.  What was most interesting was the the condo market had soared, creating compression in the housing market.  This means that 2 or 3-bedroom condos were selling at a similar price as a 4 or 5-bedroom house!

If one could buy a house for about the same amount as a condo, why would they choose the condos (which also required a monthly HOA)?  At the same time that the compression was at it’s height, Google moved in and donated $63 million to Boulder Affordable Housing, meaning that many people no longer needed to worry about being able to afford buying a condo or a house when they could apply for Affordable Housing and become a homeowner at a steep discount.  Buyers disappeared as they applied for Affordable Housing.  When several whole apartment complexes were being bought and turned into Affordable Housing, the surrounding areas has deflated in value.

It started first with South Boulder (with drops in condo prices up to 20%) and is slowly working it’s way to Northern Boulder.  I told my friends that owned condos to sell now, or wait 5 years for the market to bounce back.  Several of these friends, after hearing my predictions quickly put their condos on the market with me and went under contract quickly.  Last year (in 2016), one acquaintance asked me to sell his condo in South Boulder – which I did at $365,000 in one weekend.  It was a 2-bedroom condo (not updated).  The same 2-bedroom condos in the same complex are now selling for $299,000.

The few properties that tend to hold their value are in downtown Boulder, close to the new Google office and/or updated properties with mountain views.

Based on trends it might be prudent to speak with me to protect your equity gain over the past few years.  There has already been a correction and it may continue.  Now might be the time to sell your condo and take your equity and reinvest your sale proceeds towards a house.

Call me to set up an appointment to review your home’s value and to strategize regarding the sale of your house and the Boulder housing market.

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