I’m a nice guy so I don’t usually like to kick something while it is down, but today I will make an exception. We all know that the stock market has been really tanking for the past six months. The losses have cut our perceived wealth by the trillions and shaken our collective confidence like nothing I have seen. It is times like these when we get back to the basics and remember what we should have been doing all along.
Personally I have both financial and real estate investments. I believe in diversification and have a very long term view of investing. When I compare my personal investments over the past 15 years, I see that I have done much better in the real estate market than I have in the stock market. I see a few main reasons for that: one I know real estate and am “in the market” every day. Secondly, the Boulder area has been a great place to invest in real estate.
Since 1993 home prices in Boulder have gained on average 185%. The median price for a single family home in Boulder in 2003 was $189,000, now it is $538,000. During that same time frame the Dow Jones Industrial Average gained 134%. On December 31, 2003 the average closed at 3,754. On December 31, 2008 it closed at 8,776. In the past 2.5 months it has lost 17%.
Values are holding in Boulder and our market is slowed but certainly not rife with volitility. Here are some of the reasons why the Boulder Valley is a great place to invest in real estate.
- It’s a great place to live and in real estate location is everything.
- Limited supply of new homes. Boulder, Louisville and Superior have very limited supply of land on which to build new homes. Basic economic theory would say that prices will go up in the long run if more people are moving in and there aren’t enough new homes to house them all.
- Boulder is a University town. Nearly 30,000 students, plus all of the staff and faculty provide a dynamic market for rentals and low end sales in town. This trickles up the price chain.
- The Boulder Valley is a dynamic place to do business. We have a varied economic base which includes many new and growing industries.
I have recently identified some great investment property in the City of Boulder. There are multiple unit properties available with renters in place. If you are looking for a good place to invest some of your hard earned money, I’d love to share these opportunities with you, just give me a call.