There are several components to your question as you frame it below.
First of all, it is very possible to get a nice home in Boulder for less than $1 million. Average Boulder sales prices run in the mid-$600s while median sales prices tend to be in the mid-500s.
Even with views, you can find some pretty nice homes under $1 million. But that does not mean you are finding everything you want in a home.
We are having an inventory shortage throughout Boulder County. It is not too much of a problem in the higher price ranges, but , it sometimes pays to wait for the right home to come on the market and be ready to make an offer when it does. What I have been telling my clients is to show patience about finding the right home, and a sense of urgency once that home appears on the market.
However, looking for a home in the mountains can be another solution. As a mountain-dweller myself, (Sunshine Canyon and Pine Brook Hills) I am a little disappointed that mountain home prices have not held up as well as prices in some other Boulder County areas during the last few years. I do think we have bottomed or are very near the bottom, but it is possible I am wrong.
Nonetheless, there are some good bargains in the mountains, both for homes in very good shape and for homes that need a little work. Relatively new homes are almost non-existent. Few new mountain homes have been built during the last few years. I have been seeing a number of existing mountain homes come onto the market recently and I would suggest that you probably could find one in your price range that is in excellent condition, and probably one that has been updated during the last 6-7 years.
As for which remodeling option works best, you will need to talk to some contractors and really work your numbers. I would never presume to suggest that I could come up with figures off the top of my head.
But, it is very possible you will find that one of two options will work best. 1) Find a home that is relatively close to what you want and do some updating to make it work for you. 2) Buy some property and build from scratch.
In talking to contractors you may find that any serious remodeling could end up costing more than starting from scratch, especially with newer building codes that may require significant energy efficiency and environmental updates to the existing structure. One builder has suggested that the new codes add about ten percent to the cost of building a new structure but can add considerably more to updating an existing dwelling or to use older building plans.
Please feel free to contact me if you have any additional questions.
Prudential Real Estate of the Rockies
To answer your question:
1) It is less expensive to buy a gently used house than to build a new one in Boulder County. So, a resale house is a better investment than building new. This does not even start to account for the onerous building regulations
2) Homes that are fixed up (Pottery Barn Style) obtain a significant premium on the resale market. This premium, in my opinion, is significantly more than if you were to hire the work out. So, remodeling is a better value than buying a home that is already fixed up.
The best investment is to buy a home and fix it up.
How does lifestyle play into this?
How much is your time worth, will you enjoy fixing up a house? Would you rather design and build a dream home or buy someone else's dream home? The best values are generally not in the best locations or may not have the best layout - how will this affect your lifestyle?
When you originally pictured yourself living in Boulder, what did it look like? This is the best investment for you because it will make you the happiest!
If it were me, I'd start with searching foreclosure properties to remodel and then compare those property values to regular resale. The important factor with remodeling is finding a licensed and qualified contractor to hire for the job and to make sure the upgrades are reasonably priced and add to the value for the long term.
I would then interview reputable builders who can give a quote on the plan that suits your needs and wants, being as specific as you can. Ask them how long they have been in business and ask for referrals (if you can meet with them in person, that is best). Finding affordable land with utilities will be a challenge, however, a broker can assist you in gathering the information for available lots.
I truly wish you the best!
Lori Jarrett, Broker/Owner
Take Me Home Real Estate, LLC
GJ Gardner Homes
1. We have a lot of historical data on prices and appreciation rates for Boulder and Boulder neighborhoods on our web site http://(www.agents4homebuyers.com).
2. You'll find dozens if not hundreds of places on the web which will give you "return on investment" analyses for remodeling jobs...indicating...for example...you'll get 75% of your money back if you remodel a kitchen or 40% if you put a new roof on. All of these numbers are useless...other than maybe giving you a sense of whether you'll get a better return on a kitchen or a roof. A house that would cost you $800,000 in West Boulder might cost you $150,000 in Thornton. Redoing the kitchen with granite and stainless steel and high quality cabinets might cost you 50K in either case. You wouldn't have a chance of recouping that investment in the 150K Thornton house...that money might easily move the value in Boulder from 800K to 900K...so that you'd double your money on resale.
Boulder can be a very "street by street" market in my opinion...so the answer to your question will depend on exactly where you are talking (even though the market as a whole is "solid".)
If life style choice is not a consideration, then I would say buy a house that doesn't need a lot of work. There are lot of good buys, you move in immediately and don't have to worry about the head ache with remodel or build.
We found some great houses that didn't need any work but we ended up buying a house thats probably not the most logical choice.
Our house is in sugarloaf area, with a top of the mountain location and absolutely breath taking views from every room in the house, however, the house needed a complete remodel. The remodel took about 6 months, it was not easy and we are just about done with the exception of a bathroom.
If I were to sell the house now, I am sure if I will not get our money back; but we have not intention of selling for a long, long time. We love our home, its just the way we want it and its amazing that we are so connected with nature and only 20 mins from pearl street.
A lot of interesting responses so far! There is no one best answer to your question. Any one of us would look forward to your visiting here and taking a look at a few examples of the different strategies.
I would like to know more about your lifestyle, hobbies/interests, etc. and your priorities And what you are used to. I moved here 12 years ago, having lived most of my life on the East Coast so I know some of the differences you might find in Colorado. You can also consider living to the East of the city of Boulder (15 minutes from the downtown) and get a view of the snow capped peaks at a much lower price.
Feel free to interview me to see if I am a match for you for real estate consulting.
You can search the actual, updated MLS through my website.
I'm a Longmont Realtor. I've worked for builders in Boulder County for a good part of the 27 years I've been in real estate. I can put you in touch with several who do "dirt start" construction as well as remodels.
On your question about ROI: Boulder County is an improving market. As others have noted, some areas have held value better than others.
Generally, you can say that there are examples of real estate that can be acquired from the inventory of foreclosures and short sales that represent good potential, and some may actually be priced well. For the better homes, there is some competition. You may want to work with someone who has a good eye and knows a good value. In this market where available homes are not so plentiful, someone with a construction background can be very helpful.
As for guidance on ROI, a good answer depends on a number of factors. For instance, how long do you plan to live in the home? If you're contemplating custom, how custom? How much do you plan to spend and what are you going to be spending it on?
You really should have more than a 20-minute conversation to get into many aspects of what you are contemplating. If you are going to be working with an agent, you should interview at least three. Of course, I will add myself to Realtors you should contact. Call me. I would be happy to sit down and go over your objectives and what makes the most sense for you.
PML property movers of Longmont
So we definitely want a house with a view, and for someone willing to spend less than $1M, I realize that there aren't a lot of option in Boulder. So, I have been looking at areas that are close by in the foot hills or on SunShine Canyon Dr area (10-15 mins drive to Pearl St).
There are lot of nice houses and a few that need a surgery (probably $200K+ remodel), there are a few lots for around $200K as well.
So putting the financing options aside for a moment, what do you think has the best ROI. Buy a $750K house remodeled with views, buy a $400K house and renovate big time or just start from scratch.