Wednesday, December 21, 2005

Pop? What Pop?

by Osman Parvez


What Pop? Here's an interesting Business Week article noting the surprising strength in housing. It points to still low interest rates, a strong economy, and growth in income and profits as the likely factors driving the trend.

As we've said several times in our research reports, there is likely a bubble in a number of markets (particularly in coastal metro areas). Meanwhile our region (the Denver/Boulder area) has not experienced a wide-spread real estate bubble. During the years most bubble watchers consider prime, our market was relatively flat.

Of course, there are some areas that have (long standing) higher valuations. For example, people are willing to pay a premium for a Boulder address where a starter home goes for about $325,000. Yet, only about 15 minutes down the road in Broomfield, our team has a home listed at $203,000 in a quiet neighborhood very similar to Martin Acres (where the Boulder starter homes are), of the same vintage and built in the same style, and with an expansive basement (rare in Martin Acres). That's $117,000 less expensive for much the same house in exchange for what most would consider a short commute. And with the upcoming infrastructure changes slated for the next decade, the commute could get even shorter.

At the end of this month, we have a client closing on a $176,000 3 bedroom town-home (with a finished basement) in Lafayette. It's a well finished turn-key property, about 15 minutes from Boulder on a beautiful walking trail. This particular property also happens to abut the Louisville town line, a community described by CNN/Money Magazine as one of the Best Places to Live.

Bottom line? If you are willing to endure a short 15-25 minute commute from your place of work in job centers like Boulder or the Denver Tech Center, you'll find a number of housing options at relatively affordable prices. Try that in a coastal metro market like New York, Washington DC, Boston, San Diego, or San Francisco.



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The ideas and strategies described in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties.   We strongly recommend conducting rigorous due diligence and obtaining professional advice before buying or selling real estate. 

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