The growing number of jobs added by Google, Inc. and other high-tech companies in the small alpine city Boulder, Colo., is raising local home values and increasing demand for the area’s short supply of luxury homes.
“We have way more jobs than we have housing for and it’s the key imbalance that is driving the market forward,” said David Carner, vice president and managing broker of LIV Sotheby’s International Realty.
Sales of Boulder luxury homes, classified as homes selling for $1 million or more, were up 29% in 2015, according to an LIV Sotheby’s International Realty report released on July 21. The number of homes sold annually rose to 351 this year from 271 in June 2014.
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High-tech giant Google plans to expand its presence in the Rocky Mountain city with a four-acre campus in downtown Boulder. The move would consolidate its offices and support up to 1500 employees – increasing its number of workers over a three to four year span, city officials say.
“[Google] is going to bring a lot of high-paying jobs to our community and add a lot of value,” said Tim Plass, a Boulder city councilman who added that residents are concerned about the impact of these increased jobs on the local housing market.
A high-tech employee in Boulder is paid on average about $116,606 a year and the city has over 1,141 information technology firms, according to University of Colorado Business Research Division. Boulder has the highest density of high-tech start-ups of any metro U.S. city, according to the Kauffmann Foundation, a Kansas City-based organization that tracks entrepreneurial trends nationally.
LIV SOTHEBY’S INTERNATIONAL REALTY
“We’ve had buyers from Google already and placed them in homes. They’re coming a little bit at a time,” Carner said.
The city of Boulder is starting to resemble the Silicon Valley hub of Mountain View, Calif., a city that also has more high paying jobs than home supply, according to agents.
Boulder’s population has remained at a 100,000, for the last decade, but job growth has increased significantly with many workers commuting to the city from Denver and surrounding towns.
“We just don’t have a lot of inventory because the [city] has limited Boulder’s growth and its annexation,” said Tom Kahn, managing broker and founder of RE/MAX Alliance on Walnut who has been selling real estate in Boulder for 40 years. “The city is not getting any bigger and that puts pressure on prices,”
Home prices in the city of Boulder appreciated around 10% last year, according to the Boulder County assessor’s office.
The average selling price for a Boulder home was $1.4 million, a 9% increase from a year ago, according to Sotheby’s International Realty July report.
“It was about five years ago when $1 to $2 million became the common market,” said Kahn, who sold his first $1 million, single-family home in Boulder 15 years ago when that price range was considered unusual.
Most of Boulder’s housing stock is dated. Many developers are taking $700,000 and $800,000 homes as teardowns, so they can build $2 to the $3 million high-end homes, Kahn said.
Many of the older ranch style homes from the 1960s have been redesigned with a modern “pop-top” second story and sell for $1.5 million, Kahn said.
“Boulder has an even hotter market than Denver and its driven by our employment and inventory. Per capita we have a lot more million dollar homes here,“ said David Carner. “It feels like a boom town here.”
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