As Colorado continues to attract newcomers, economists at the University of Colorado Boulder’s Leeds School of Business predict that the state’s economy will expand in 2017. The school’s annual forecast estimates that the state will add 63,400 new jobs this year, with construction, tourism, and financial services sectors topping the list as the top three fastest-growing job areas. How will this impact the real estate market?
Statewide, demand continues to rise for new single-family homes, construction of schools, and a finance/banking sector (due in part to booming real estate and insurance activity). Construction as a whole is predicted to expand 5.7 percent, and we’ll see most of this growth occurring in single-family homes. New jobs in this industry are expected to increase by 166,000 in 2017.
The real estate market in Boulder County continues to experience limited inventory with high demand. New construction in the area is often hard to come by due to building restrictions, the high cost of land, and few development opportunities. This strong seller’s market is expected to continue well into 2017. If you’re preparing to sell your home this year, expect multiple offers, which could boost the sale price.
Are we in a bubble?
Now, the question that’s on everyone’s mind: Is Boulder in a housing bubble?
We are in a “shift,” not a bubble, says Lawrence Yun, chief economist for the National Association of Realtors. At a recent panel discussion, local realtors explained the six factors that can lead to a housing bubble:
– Price appreciation
– Home flipping
– Percentage of mortgages in default
– Home prices vs. rent prices
– Amount of new construction
– Home prices vs. wages
Low interest rates have offset rising home prices in Boulder County over the last few years. Economists predict that even as the rates will gradually rise, they will still remain affordable. Inventory in Boulder County remains tight, and there can’t be a bubble when demand outpaces supply.
Overall, we are looking at extremely positive conditions for real estate growth in the area. Expect home prices to continue to rise while the market remains strong in 2017.
Jennifer Egbert is a Realtor at RE/MAX Alliance Downtown in Boulder and specializes in Luxury neighborhoods, home builders and most current market conditions. To learn more about the Boulder real estate market, visit jenniferegbert.com, e-mail [email protected] or call 303.442.3180.