Thursday, September 18, 2014

BBC Coverage of Boulder Housing

by Osman Parvez

Boulder's housing challenges are becoming international news.   Here's a video from the BBC highlighting the problem.   It features a few notable residents.



hat tip:  N. Fiore ---
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Wednesday, September 17, 2014

Boulder, Can We Talk?

by Osman Parvez

Here's how last night's meeting went. 

Sam Weaver withdrew his ill considered proposal for a 9 month emergency moratorium and Council narrowly voted against a comprehensive development strategy.   The vote was 5-4 against and interestingly, fell along gender lines with male council members against the measure. 

Construction Continues at the Wencel Building (9/17/14)
As I mentioned in recent blog posts, Boulder needs an efficient public process that results in a shared vision for our future but enacting emergency powers to halt all new permits (of substantial size) wasn't the right approach.   I'm glad City Council came to their senses. 

We need to focus.  The Comp Plan is a joint project with the county, it's not specific enough.    Other planning efforts seem disjointed and reactionary.   If I was on Council, I would have actually voted in favor of a comprehensive development strategy as long as it wasn't bundled with an emergency moratorium. 

Liza Morzel's email on 9/15 nailed it.  

"Where is it Boulder wants to go, how do we want to get there, who do we want to get there, are we there, if not, at what pace will we accomplish goals?  Do we have a vision? What is our plan? Do we have a consensus? Time for community discussion."

More Reading:  Boulder Eyes Development Code Changes

The Boulder Development Map



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Tuesday, September 16, 2014

Avery Brewery Time Lapse

by Osman Parvez

Did you know Avery's new $27MM brewery took nearly two years to go through the planning process?  When complete, it will feature the area's largest craft brewing production, offices, tap room, and restaurant.    From a real estate perspective, it will also create a magnet for the Gunbarrel neighborhood.

Here's the time lapse (courtesy of Avery).



In addition to supporting all those construction workers and solving the brewery's production challenges, when operational, Avery will also add at least 20 full time jobs to their payroll.  

By the way, this is the type of project that the proposed emergency moratorium will quash.  Why?   Because i
t involved a change to land use and variance for the height of tanks, triggers for site review.  See Council Seeks 9 Month Ban and More on the Moratorium for additional information. 

Council's input?   "Members including Sam Weaver said the entryway, with its high archway, looked too grandiose for the building's character. They offered the comments as pointers instead of making a change to the entryway a condition of the plan's approval." DC 5/17/17
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More on the Moratorium

by Osman Parvez

A few additional thoughts to my post yesterday on Council Member Sam Weaver's proposal for a moratorium on building permits.

1.  I'm not against additional study and public process.  I'm for that. I'm against using emergency ordinances as a policy tool.   


2.  If you're against the emergency moratorium, consider signing this petition.   You can also email Council directly at Council@BoulderColorado.gov and attend tonight's public meetings.    

3. Erica Meltzer's Daily Camera article is informative.  Here's an excerpt from my favorite comment: 

If we don't like how a few buildings turned out -- that, by the way, house our workers and seniors -- then let Council and Planning Board have a study session and guide some of the projects that are in the pipeline. No problem. 

A moratorium hijacks our local democracy and denigrates the work of those in our community who cared enough over countless hours to engage and participate in our current code and land use plans. The current plans reflect our collective vision and to throw these out without process or notice sends the wrong message about how quickly that work can be undone at the whim of a few. Enacting emergency government powers without actually identifying the problem is not the kind of democracy that we all demand in this community. 

Consider that Weaver wrote and widely distributed his motion for a moratorium BEFORE the study session has even commenced or the community's diverse voices have been heard. That tells you all you need to know about whether this would be a fair process with the community's best interests at heart.

- by MattFoley847



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Monday, September 15, 2014

Council Seeks 9 Month Ban on Building Permits [Aspenization]

by Osman Parvez

Heads Up.     Boulder City Council is preparing to vote on another emergency ordinance on Tuesday. 

The proposed ordinance is below.   Links and bold text are my additions.  The proposal is from Council Member Sam Weaver and of course, Plan Boulder supports the measure.

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(a) the City Manager be directed to not accept applications for any Site Review as defined under BRC 9-2-14, or any review where land use intensity modifications or height modifications are requested, nor issue building permits for structures not already approved under such reviews except as provided in (c) below, and not accept applications for rezoning, as of tomorrow September 17, 2014, except as required by state or Federal law;

(b) the City Attorney be directed to prepare and present to the Council at its next regular meeting the text of an ordinance to impose a temporary stay on the acceptance by the City of such applications and on issuance of such permits as noted in (a) above, and on any further action on those applications which have not already been approved as of this date, except as provided in section (c) below, from tomorrow September 17, 2014 until June 30, 2015, or until the measures referred to below are deemed adequately advanced (even if not fully complete) to lift the stay with a majority vote of Council, whichever occurs earlier;

What to Do During an Emergency Ordinance
(c) the City Attorney be directed to include measures in the ordinance that provide that any project that has already applied for Site Review or other review as mentioned in Section (a) above, and has received a Concept Plan review from the Planning Board, but that has not been previously approved through the regular process, may apply once through an appeal process for consideration prior to the end of the period mentioned in Section (b) above, and after demonstration of inclusion of all required affordable housing generated by the project on-site and after demonstrating exceptional community benefit and with the approval of 4 Planning Board member and 5 Council members at a subsequent regular meeting of each body, may be allowed to be processed through the currently established development review processes.

(d) the City Manager be directed to undertake a robust public process to create a Comprehensive Development Strategy using surveys, public meetings, consultation with neighborhood organizations, community organizations, and other stakeholder groups, and other appropriate means to test alternative growth outcomes and scenarios, and thereby determine the amount of future residential, commercial, and industrial development, and other factors, quantities, and qualities related to such development, to be identified during the process, that Council determines a majority - or at least the largest plurality - of the citizens of the City believe to be in the City’s best interests;

(e) this comprehensive public process be initiated, designed, developed, managed, and reviewed on an on-going basis by a committee of Council members selected by the Council, Planning and other Board and Commission members and citizens as designated by the Council, and city staff members as designated by the city manager and city attorney, and the design be approved by the Council before the process is initiated;

(f) the City Manager work with the Community Planning and Sustainability Department to make any legislative, process, or code adjustments that are determined to be needed in the process described in (c) above;

(g) the outcome of this process be reflected in the upcoming five-year update of the Boulder Valley Comprehensive Plan;

(h) the outcome of this process be used as the basis of an ordinance or ordinances regulating development in the City; and

(i) the City Manager be directed to suspend activity on any long-term planning processes that the City Manager determines could be substantially negatively impacted by the Comprehensive Development Strategy effort, until the time such process is completed.”

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A Few Thoughts

Council Responds to an Emergency
1.  Site Review is the trigger.  Not every building permit requires Site Review.   The majority of homeowner improvements and even additions, if strictly within code, don't trigger Site Review.

2. This ordinance is primarily aimed at multi-family building permits and where variances are being requested for height limits, zoning, or intensity standards.  See table 2-2 in BRC 9-2-14.   Think Boulder Junction, Violet Crossing, The Residences at 29th Street, and many other recent and currently underway developments.   Landlords and homeowners rejoice, lower supply = higher prices.   The Aspenization of Boulder accelerates. 

3. The city's density limits and affordable housing goals are inherently conflicted.   We do need a comprehensive review of occupancy rules, density limits, and affordability.   I'm strongly in favor

4. Intense review of larger scale projects is a good idea.  Here's the thing. We already do that.   It's wrong to use so called emergency ordinances as a policy tool.  It's dishonest.  There is no emergency but I'm still in favor of comprehensive review of our city's housing policies.   

5. City Council says they would like to hear from you, but honestly, they're not listening.  If you've ever attended a City Council meeting and seen the bored looks on Council Member faces as citizens waste their two minutes of precious allotted time, you know what I'm talking about. 

6.  Compatible development ordinances began in the same fashion - with an emergency ordinance.   When it became clear that enough citizens were concerned, Council spent hundreds of thousands of your tax payer money on consultants to supposedly help the community reach consensus.   I attended those meetings.  It was obvious from the start that the consultant's surveys and other materials had planned outcomes.   Council's version of public process is an expensive smokescreen and they voted the way they had planned from the beginning.  

7. The meeting begins at 5pm tomorrow, Tuesday September 16 at 1777 Broadway.  The first two hours are a study session so sorry, you won't be allowed to talk.  At the regular Council meeting, from 7pm to 9pm, Council may decide to vote on the matter and if you want, you can sign up for a 2 minute speaking slot.    Sign up to be ignored by clicking HERE or email the members at Council@BoulderColorado.gov. 


images:  Mo Riza,  Annie Mole, and the U.S. Army
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Sunshine, Daydream. A Few Thoughts on Decks

by Osman Parvez

There's nothing like a deck.    It's a place to hang out with family and friends, share a meal, and enjoy the sunshine.   A well designed Colorado home almost always includes outdoor living spaces and beautifully transitions between indoor and outdoor.  

I've helped a lot of buyers over the years, and I've learned a few things about decks.    Here's a couple of things to consider when you're shopping.  


1.  Colored Composites
Colors are cool but they may not go all the way through.  I took this photo at my client's new Toll Brothers house at Anthem Ranch in Broomfield.   As you can see, the color is just through the first few millimeters.   It's highly visible at the end of any boards, such as this railing. 

2.  Maintenance
No deck is maintenance free.   Composites scratch, fade, warp, and get dirty.   The major composite manufacturers have been sued multiple times (and settled) over mold issues.  Older decks are more prone to the problem.   It's unclear whether newer composite will be more mold resistant.

3.  Old Fashioned
Personally, I prefer a traditional wooden deck but the intense Colorado sun makes short work of finishes.   Pine, cedar, redwood, and mahogany are options and the higher end you go, typically the lower maintenance required. 

When it comes time to work on the deck - sanding and refinishing, power tools make short work of decking.  It takes much longer for railings and balusters, and the labor cost (or your time) can be very high.   Expect to seal and/or stain a wooden deck every three years or so.   

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Friday, September 12, 2014

When The Real Estate Commission Calls [Education]

by Osman Parvez

Heads up, Realtors.   This is what a Continuing Education (CE) audit looks like.  



Just in case you didn't believe it actually happens. 

Of course, I didn't have any issues providing evidence of my CE.  I take several courses every year to stay on top of the latest, particularly courses which focus on value added skills like negotiation.    

Last year, my favorite was the Certified Negotiation Expert course I took with Oliver Frascona.    As with all of Oliver's classes, it was excellent stuff.

If you recommend an advanced negotiation courses, leave me a comment!
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Thursday, September 11, 2014

September 11th

by Osman Parvez


On September 11th every year, I find myself awash in memories.   I think about the people I knew in the towers, the thousands that died when they fell, and the hundreds of thousands that have died since in wars around the globe.  

In the wake of so much suffering, I also think about Fred Rogers.  

"When I was a boy and I would see scary things in the news, my mother would say to me, 'Look for the helpers. You will always find people who are helping.' To this day, especially in times of disaster, I remember my mother's words and I am always comforted by realizing that there are still so many helpers – so many caring people in this world." 

On September 11th, 2001, I was working at an investment bank in midtown Manhattan when the first tower was struck.   I was called from my desk to the trading floor.  We watched the television screens and shock turned to horror as we realized what we were seeing.   

In the immediate days that followed, I gathered with family and friends. We looked for ways to help and collected supplies for the emergency responders. We held vigils for the missing and tried to make sense of the tragedy.  

September 11th has had a massive influence on my life.   I didn't know it then, but looking back, it was a turning point.   It helped me realize the importance of family and friends over far less meaningful things.  It helped me understand how contribution and service matter far more to me then bonuses, power, and ego.   It also pushed me away from investment banking's money culture and eventually to moving to Boulder.   

Hard to believe it's been 13 years. 



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image:   Ludovic Bertron

Wednesday, September 10, 2014

Chocolate Cake for Breakfast? [Gratitude]

by Osman Parvez

Yesterday, I attended a closing for my out of town sellers.   After we were all done, I got a surprise.   The buyer presented ME with a closing gift.     

How often does that happen?  Pretty much, never. 


Boulder's Peace, Love, & Chocolate describes this beauty as salted caramel mousse piped between two layers of decadent dark chocolate cake, finished with dark chocolate French buttercream icing, enrobed in sexy gown of cocoa gelee, wearing a ring of dark chocolate pearls. 

Yum!

Now - this particular deal required more oversight and effort than most.  It also involved a creative negotiation to make it happen.   

Want to know what made it worth it?    The gratitude  - not just from my clients but from the buyer, as well.    It totally made my day. 

So, guess who had salted caramel chocolate torte for breakfast?    THIS GUY.

Don't worry, it had eggs and milk and flour... 




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Fed Releases Rental Study, Surprises No One

by Osman Parvez

Can the next generation afford to buy?     Short answer: not so much. 

That's one of the not so surprising conclusions from a recent Fed study.  Income has not kept pace with real estate appreciation while the cost of higher education has continued to rise.   Meanwhile, the majority of people - including most renters - think buying is a smart idea.  

From the WSJ:  Why More Renters Aren't Buying (Hint: Weak Incomes, Savings):  

Around three in five respondents think that buying a home in their ZIP Code is a good investment, compared with one in eight that think it’s a bad one. “Current renters are as bullish on housing as current owners, or perhaps even slightly more so,” the authors conclude. Renters expect prices to rise at a slightly faster pace than owners over both a one-year and a five-year horizon.



Renters can't afford to buy, too much debt not enough income. 


The majority think housing is still a smart investment

What About Boulder?
Here's something that may surprise you.  The majority of Boulder residents do not own their own homes.  Renters hold a slight majority over owners in Boulder. 
  

Keep in mind that nearly 44% of Boulder is also under the age of 25.  We're a college town.   There are currently about 32,000 students who attend CU.     

Fun fact:   Fewer than 20,000 ballots were cast in the last City Council election (2011).  Suzanne Jones received the most ballots in her favor, with 12,933 votes.  


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Friday, September 05, 2014

Full Steam Ahead: 1707 Walnut Street

by Osman Parvez



Framing is nearing completion at 1707 Walnut Street.  This new 3 story building will feature 26 units and underground parking.   The permit pulled on 12/16/13 was for $3.7MM.

The developer has begun pre-leasing with move in dates beginning in 1Q15.   These modern urban lofts will feature interior finishes that include hardwood flooring, hardwood cabinets, solid surface counter tops and stainless steel appliances.   Parking and storage are available.  

Here's what rent looks like. 





Additional Resources: 
Boulder Development Map

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Thursday, September 04, 2014

End of Summer Boulder Market Wrap Up [Analyze This]

by Osman Parvez

Ready for another look at market conditions in Boulder?   

Straight to the charts...



This chart shows total inventory for houses (blue) and condos and town Homes (orange).   Total inventory (which includes pending, active/backup, and active listings) has been dropping from late June through Labor Day.   There are now 25% fewer houses on the market. Condos and town homes have fallen 33%. 

If you're a regular blog reader, you know that this seasonal pattern is normal for Boulder.   Inventory grows in January and peaks in June before reaching a bottom in December.   What's not normal is inventory compared to the long term average.   We're still at historic lows.

Take a look.



This chart above shows inventory of attached dwellings in the City of Boulder. The shaded area is the average monthly inventory for a ten year period.  The red line is this year.    July inventory was 55% below the long term average for the month.   



Here's the same chart for single family houses in Boulder.   The shaded area represents the ten year average on a monthly basis.  The red line is this year. July saw inventory levels 46% below the long term average

What Most Boulder Realtors Don't Know
(But Should)
 




This chart above shows percentage of properties under contract by property type.   From late June to early September, the percentage of single family houses under contract fell substantially, from 44% to 34%.     Meanwhile, Condos and Town Homes have risen slightly, from 51% to 53%.    

To put it bluntly, this is unusual market activity.   Both property types should be dropping but attached dwellings are holding in there.   

What Does It Mean?    
For buyers and sellers, the market for Condos and Town Homes feels just like summer.  The market for single family houses?  Not so much.    

Right now, there is clearly higher demand for attached dwellings than traditional single family homes in Boulder.    Market data also shows that attached dwelling sales are far closer to the historic high volume mark than single family homes (unpublished).  We'll look at those pretty charts in another post, for now you'll just have to trust me. 

Remember:  market conditions impact everything, most importantly your search and offer strategy (if you're buying) and pricing (if you're selling).   How can you expect to negotiate effectively if you're going in blind?  

How It Affects You
I hope you've found this analysis useful but to make a smart real estate decision, you need to understand market conditions relative to your price range, location, and property type.  There is no shortcut, no amount of happy talk or hand waving that makes up for it.  

If your ready to talk about your real estate situation, choose your real estate adviser carefully.   Go with an agent who understands market conditions at a high level and will dig through the neighborhood carefully.  It's the only way to give you the very best advice.   Don't forget, that's what you're paying for.    
If you'd like to consider me for that role, you can learn more about me HERE or go ahead and click HERE to schedule an appointment.  You can also call me directly at 303.746.6896.  

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Wednesday, September 03, 2014

Council Looking for Ways to Increase Hobos Downtown

by Osman Parvez

This is a controversial topic.   I'm probably going to offend some people.   I'm still diving in...

Last week, the Daily Camera published Message to Boulder Council: Fight homeless with more housing.   Here's the lede:  

The solution to homelessness is housing.

That was the message the Boulder City Council heard from a series of speakers...

If that's the primary message Council is getting, no wonder they're tone deaf to the community's outrage.    The comments section nails it.   Here's the top rated one: 

Oh give me a break. My wife can't even walk down the creek path any more with our kids because it is a skid row for drunk and drugged hobos. There are zero "families" down there that need assistance. 


Look, I'm all for helping families down on their luck, but Boulder needs to open its eyes to the homeless who have taken over the downtown area, making it completely uncomfortable for families. If you keep creating services, they will keep coming and ruining the quality of life here.

I've heard this sentiment echoed from friends and family.  I've heard it from clients.   It's no joke. 

Look, I'm 6'2" and about 190 lbs.  I don't feel comfortable walking past groups of transients.   It's not that I'm offended by their frequent solicitations, even when it's blatantly for drugs ("Hey man, give me your weed.") It's the transients with mental health issues that concern me.  It's the potential for violence.  It's a real issue.  What does it take for Council to wake up and pay attention.  Click the links in this paragraph for examples. 

The solution starts with a panhandling ban and followed by a reduction in incentives for the transient population.  City Council knows it. They lack the guts to pass the measure.   

There's a well known economic principle that homeless advocates ignore:   When you subsidize something, you get more of it.    It's that simple.  

As a progressive, caring community - we need to support a safety net for residents and fewer incentives for transients to relocate here.   If you want to deepen the safety net, support the  Emergency Family Assistance Association (EFAA).   This organization provides a range of services for residents who are in need. 

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Monday, September 01, 2014

Goodbye Oliver Frascona, You Will Be Missed

by Osman Parvez
By all accounts, the real estate community suffered a great loss this evening.    Although not yet confirmed, it appears that Oliver Frascona died in an aircraft accident.    

Oliver's classes were among the best I've ever had, in any setting.     He was a true educator,  relentlessly focused on raising the bar, and he helped Realtors understand complex issues with humor and humility.   He also cared a great deal about giving back to the community.

Ironically, the last conversation I had with him was about flying.   I brought it up casually and he jumped at the opportunity to talk about his passion.  He even invited me to join him.  

I'll be blunt. I admired Oliver Frascona and had a great deal of respect for his work.    Here's a glimpse ...





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Sunday, August 31, 2014

Avery Brewing, Watch it Happen

by Osman Parvez

Yesterday - I was at Avery sipping on an Eremita (highly recommended), when I learned the new brewery has a construction cam.     

Here's what the project looks like. 



Check out the cam HERE.   How cool is that?

The new 96,000 SF facility will have an initial 100K barrel capacity (with potential of up to 500K barrels per year), corporate offices, tasting room, 249-seat restaurant, outdoor seating to accommodate 100 people, and a gift shop.  Cost?  About $27MM.    It should be complete in 1Q15. 

Frankly, this project coupled with Gunbarrel Town Center is a big deal.   It will be a magnet for residents, visitors, and office workers.       



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Friday, August 29, 2014

Understanding the Marijuana Market in Colorado [Analyze This]

by Osman Parvez

Dude, where's my tax revenue? 

Eight months have passed since recreational Marijuana became legal in Colorado.  It's a big deal for our state and local economy.  It has cultural impacts.  The rest of the country is watching.
future tax revenue?

Today, the majority of Americans favor legalization1  but medical marijuana is legal in only 23 states.  Recreational pot is legit only Colorado and Washington state (map).     

Implementation is already being called a success2 and despite the hoopla, Colorado has not become the Amsterdam of the Rocky Mountain region.  Sure, you catch the occasional whiff of pungent herb in the air.  I swear people are also driving slower.  Otherwise things seem pretty much the same. Meanwhile, violent and property crime in Denver has dropped 10.6 percent.

Wondering what it's like to buy pot in Boulder?  You might enjoy a little story written by a visitor from Amsterdam.  Prepare to be underwhelmed. 

The Numbers
Here are some facts and figures to get your head around. 


   
The state has left it up to the municipalities to determine if they'll allow recreational shops.  Some, like Colorado Springs, are still debating whether to allow recreational marijuana and how to regulate it.    Denver was an early adopter and currently claims 90% of recreational shops.   As cities and towns continue to enact their own rules, expect Denver's dominance to fade somewhat.



The number of recreational pot shops remains well below medical shops, state-wide.    This is largely driven by the fact that the cost for recreational is much higher than medical and it has been very easy for Colorado residents to obtain a medical card.   Recreational pot consumers are largely tourists.  Resident consumers are obtaining their marijuana from medical shops or from their long established black market dealer. 

About 16,000 medical marijuana cards have been issued in Colorado.  This number has essentially remained the same since recreational pot was legalized.   It costs only $16 to obtain a medical card, in addition to the cost of visiting the doctor.   It turns out there a lot of residents in Colorado with migraines. 



Tax is one of the biggest factors.  Colorado currently taxes recreational pot at 40% but only levies a 3% tax on medical marijuana.    Municipalities are free to enact their own additional taxes.   The City of Boulder, for example, taxes growing at 5% and tacks on another 3.5% for retail sales.

Colorado saw a 20% increase in sales for June compared to the previous month and $20MM in taxes have been raised due to pot this year, far below what was expected.3 Meanwhile, debate continues over regulation and taxation schemes.4

Because banks are scared to handle marijuana business, tons of cash is floating around.  Many pot shop owners and managers are carrying firearms to protect themselves.  Not a good combination.    The long arm of the Federal Government continues to cast a dark shadow.    Plus, we're probably missing out on some tax revenue because of sketchy accounting (typical with cash businesses). 

The Real Estate Perspective
There isn't any evidence of people moving to Colorado specifically for recreational pot, although there are stories about people coming here for medical reasons. Meanwhile, there is anecdotal evidence that some home owners are reaping in cash by hosting out of town visitors via AirBNB and VRBO.   

Due diligence tip:  if you're planning to invest in property and turn over short term rentals, review your HOA rules carefully.  I know of one resident (a Realtor, no less) who has found herself in hot water by Air Bnb'ing her downtown Boulder condo.  

On the commercial side of things, Denver warehouses are now extremely expensive.   Boulder warehouses, too.   Good luck finding one.  
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1  "The Great Pot Experiment," The Economist, July 12, 2014.

2.  "Colorado’s Rollout of Legal Marijuana Is Succeeding; A Report on the State’s Implementation of Legalization."  John Hudak, The Brookings Institute, July, 2014. 


3  Markus, Ben.  "Legal Marijuna: Six Months Later."  Presentation to Boulder Valley Rotary.  August 25, 2014.

4  "Weed Control;  an Incoherent Plan for Regulating."  The Wall Street Journal, August 5, 2014.

image:  Dank Depot

Thursday, August 28, 2014

Narrowing the Gap [Analyze This]

by Osman Parvez

Boulder real estate is cheap.   

What's that you say?   Huh?

Oh sure, it's pricey when you compare it to places like Omaha and Kansas City.   Try comparing it to places you'd actually want to live -  communities with fantastic public schools, a healthy economy, amazing weather and outdoor rec opportunities, a highly educated population, a research university, and proximity to a major airport hub.  It's a short list. 

It's no secret why Boulder keeps attracting new residents (here's why). Despite the relentless demand, we're not building significant amounts of new housing within city limits.  This isn't going to change (thankfully).    High demand and constrained supply = higher prices.  It's economics 101  

Boulder is cheap when you compare it to other places you might consider living.  The more interesting question is how much and by how far has the gap narrowed with other desirable cities.   

Take a look at the following charts. 



You're looking at the median price for homes sold in the Denver MSA, Boulder, and San Francisco during July, 2014.   

Why San Francisco?      To be honest, it's a place I'd consider living if I weren't so infatuated with Boulder.  I'm also going on a trip there in a few weeks and I want to write it off I'm doing a little homework on the community.   

San Francisco is the center of our nation's technology industry, a hub of entrepreneurs and established tech giants.  It's a great place to start a company. Boulder has plenty of tech and a higher percentage of early stage companies.  It's also widely recognized as a great place to start a company (see How Boulder Became America's Startup Capitol). 

Note: Data sources for the chart above include IRES for Boulder and Zillow's Home Value Index for Denver and San Francisco    Yes, I've bashed the big Z several times in the past but they have also quietly been improving the quality of their data - enough so to include the Denver ZHV index at least (see Zillow Continues to Mislead for why you shouldn't trust their Boulder data, however).  

Keep in mind that the Denver MSA includes parts of Aurora and Lakewood you may not want to live in, not just the hip urban downtown center.  

The Denver MSA is about 43% less expensive than Boulder and San Francisco is 45% more expensive.   No surprise to anyone who has shopped for a home in both (shout out to you, Ben.) 



This next chart shows median rent.    Compared to Boulder, San Francisco is 31% more expensive.    The Denver MSA is 22% less expensive.  

Note:  Rental data for Denver and San Francisco is from Zillow.  Finding solid data for the Boulder rental market is challenging (even for me).  $2200 per month is an educated guess based on my market knowledge and assuming a typical 3 bedroom house in an average location worth about $475,000.    




These last two charts look at affordability and how it has changed over time.  

The first one is based on data that Zillow published last month.   They're taking median income from the US Census American Community Survey and simply showing what share of income would go towards the monthly payment on the median price house.    For comparison purposes, the bars above show the current share (brown) vs. the historic period (green)of 1995 to 1999 - prior to the real estate bubble. 

The Denver MSA has gotten a little more affordable.   If you bought a median priced house during the pre-bubble historic period,  21.6% of the median income would go towards your mortgage.   Today that share is down to 18.9%.   

San Francisco has gone the other direction.  The monthly payment on a median price house has increased from 37.7% to 42.6% of the local median income.   

It's safe to say that Boulder is somewhere in the middle, not quite nose-bleed prices of San Francisco but also not as cheap as the Denver MSA. 

note:  Don't ignore the difference in down payment.   In addition to the higher monthly carrying cost, you'd need to come up with $43,320 more in San Francisco than in Boulder - at the median. 




Here's the same chart for renters.   At the median, the portion of income that is going to rent has increased from 21.6% to 31.8% for the Denver mSA and from 28.1% to a eye popping 43.3% for San Francisco.     Not only has the relative cost for renting increased to a much larger share, vacancy is at near historic lows (read: Average Rent Spikes 17% in Ft. Collins, Boulder). 

Final Thoughts
Boulder is far more affordable than the benchmark San Francisco.  If it's not within reach of your budget, there are solid options within easy commuting distance (Broomfield, Erie, and Longmont for example).   From an investment perspective, Longmont in particular is set to boom.  I'll save that for another post. 

Entrepreneurship requires a healthy mix of talent and capital. Entrepreneurs also want to live in a place that is overflowing with outdoor recreation opportunities, has fantastic weather, and is a magnet for creative talent.  There's a reason it's happening here. 

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