Colorado's college towns braved the nation's real estate collapse relatively well. Home values hung tough and didn't experience the dramatic drops that many of the nation's other locales did. It was the number of home sales that took a dive. But now even that's beginning to improve.
There were 752 houses sold in Boulder between Nov. 1, 2011, and Oct. 31, 2012 — a 23 percent increase compared to the same period the year prior, according to a report the Boulder Area Realtor Association released Wednesday. Homes in Boulder have sat on the market for an average of 75 days over the last year compared to an average of 91 days the year before.
“Our pricing and home values have changed very little over the past few years, even with the economic downturn,” Boulder Area Real Estate Association Vice President Kenneth Hotard said in an interview. “What's changed in our market more than anything else is sales volume and that has begun to rebound.”
The average sales price in Boulder in November was $683,271 and the median was $602,000, records show. The average sales price over the last 12 months was $668,027 — a .3 percent decline from the year before.
Duane Duggan at Re/Max of Boulder said the supply of single-family houses is nearing a 10-year low with buyers snatching homes priced under $600,000 especially fast.
“If they're priced right, they'll go under contract on the first day,” he said.
There are 658 homes in Heatherwood, a neighborhood in northeast Boulder, and at the peak of the market there were typically 20 to 30 homes there for sale, Duggan said. Today there is only one. In south Boulder's Martin Acres, the percentage of for-sale homes under contract is above 50 percent, he said.
“For the last few years, my job had been mostly about keeping in contact with my sellers,” Duggan said. “That's changed. Now it's more about the strategy of pricing it right to get the most money out of it.”
Boulder is the priciest zip code along the Front Range with four-bedroom, two-bathroom houses fetching, on average, over $1 million, according to a recent report compiled by Coldwell Banker.
The most expensive sale in the Denver metro area in October was a four-bedroom, six-bath 4,600-square-foot home in Boulder that sold for $3.9 million, Coldwell Banker reported.
In Fort Collins, home values are up about 4.3 percent over the past year.
Chris Reilly, a broker at The Group, said high-end homes in the Fort Collins area suffered the most during the recession.
“But now my offerings in the $900,000 range are seeing six showings, rather than three, which is what we saw a year ago,” he said. “The number of showings has accelerated dramatically over the last year. Homes that are priced right and show-ready receive multiple offers in the first few days.”
The presence of the University of Colorado and Colorado State University have been instrumental to the relative durability of Boulder and Fort Collins real estate, respectively, brokers interviewed for this story said.
Research at the universities have attracted a bevy of notable federal laboratories and lured private businesses to both Boulder and Fort Collins. Add in Colorado's sunny weather and endless outdoor opportunities and magazine editors routinely hail the towns among the “best places to live.”
“A lot of people who go to CSU don't leave when they graduate,” Reilly noted.
Boulder and its neighbor to the north have seen similar trends. But in Durango, home to Fort Lewis College, the market played out a bit differently.
“Whereas Fort Collins has mirrored the Boulder area experience at a lower price point, I think Durango took a bigger hit,” said Hotard, noting that he owns a property there and has kept an eye on its activity. “Durango saw not only a sales volume reduction but it saw its property values challenged to some degree. Still, it didn't destroy the real estate market by any means.”
Durango was a red-hot destination for baby boomers and the “amenity-driven market,” said Don Ricedorff of the Wells Group and Colorado Association of Realtors, but that all changed once the global recession began to take hold.
“Before going into the downturn we perceived Durango as different. We thought we weren't going to be impacted like the rest of the country,” he said. “We were wrong. Durango was impacted because the whole world was impacted. But the reality is we weren't impacted as badly as a lot of other markets."
Home sales in La Plata County peaked in 2005 with 1,357. Those types of transactions plummeted to 561 in 2009, but they have been on the rise ever since. Ricedorff said 824 houses have been sold over the last 12 months.
“We're seeing transactions grow by 100 every year over the last few years, give or take,” he said.
The median price for a home in downtown Durango this year is off 17.2 percent compared to the market's peak, Ricedorff said. The median price of a home downtown was $415,000 in 2006 and this year it is $343,500. Interestingly there were the same number of homes sold downtown that year — 154 — as this year but their total market value fell from $72.2 million in 2006 to $60.9 million over the last 12 months, according to Ricedorff's research.
Among the differences that distinguish Durango from Boulder or Fort Collins is its relative isolation and the smaller size of its college.
The full-time enrollment at Fort Lewis is 3,856 students — a far cry from the student populations in Boulder and Fort Collins where undergraduates and graduates total nearly 30,000 on each campus. But brokers say without its college, Durango wouldn't be as appealing to prospective property shoppers.
“We're heavily influenced by the college. It is a wonderful thing to have, especially in a small town,” Ricedorff said. “We have a lot more cultural diversity thanks to the college. We have a symphony in Durango if you can believe that. For people looking for a small community with a cosmopolitan feel, Durango can offer what a lot of other towns of its size cannot."
College graduates or, more precisely, "millennials," (people born after 1980 who came of age around the millennium) are already changing the complexion of real estate buying habits, Ricedorff added. With an estimated 83 million millennials in the United States, which is several million more than the baby boomers, the up-and-coming generation will impact society on all levels.
"If the millennials stay after graduation in Boulder, Fort Collins or Durango, they'll be looking for something different than what we used to see: big houses in the suburbs where you commute long distances," Ricedorff said. "The millennials don't care as much about the size of the home. They're into the cultural and ethnic diversity. They want to experience things. They'd rather have a small home in the center of the community with vibrant things happening around them. They're going to have a big impact on these college towns. They already are. I'm seeing the baby boomers start to do the same thing. Soon, we may see those two groups competing for those same in-town homes."