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