Boulder is located where the Great Plains and the Rocky Mountains meet, sitting 5,430 feet above sea level in northern Colorado. As a result, the city provides picturesque mountain views and beautiful landscapes. It is home to more than 104,000 residents and is the 13th most populous city in Colorado. Its great outdoors offers 300 miles-worth of hiking and biking trails, perfect for the active and adventurous.
In terms of economy, the city has recently been named the fastest rising tech hub in the world. Its core industries include aircraft, biotech, cleantech, and information technology (IT)/software. The University of Colorado Boulder and several other highly regarded schools are also located in the city. With this, the cost of living in Boulder is equivalent to that of other technologically-driven and highly-educated cities, according to the Boulder Economic Council.
The Cost of Building a Home in Boulder
As young professionals are moving in and university students are staying, there is a growing adult population in Boulder of individuals with bachelor’s degrees or higher (60.6% of the adult population currently). In addition, Boulder is consistently ranked as one of the best places to live in the country. Thus, there is a little bit more competition in the city’s property market. Despite having higher median home prices, there were 11% more new single-family homes listed in May 2022 than there were in the year prior. The state of Colorado has also seen an increase in single-family home listings only a month apart in the second quarter of 2022, also driving home sales higher.
The average cost to build a home in Boulder is $475 to $550 per square foot. In comparison, the U.S. average is $207 per square foot. To further understand these costs, cities have their own rules and regulations about new home construction. Many factors affect the varying costs of building a home here; some of these factors that influence it include the location within the city, design, and materials. All of these costs are categorized into two: the hard costs and the soft costs.
Hard costs are all the material expenses directly related to the building of the house. These expenses cover the necessary labor and equipment. It also includes the materials for the roofing, flooring, framing, and concrete.
Depending on the project’s quality and location, home construction costs vary from city to city. A value-conscious home in Boulder could be built for $400 to $475 per square foot. For a mid-range home, it could cost homeowners $475 to $550 per square foot. For homeowners who wish to build a luxury custom home, it could cost them $550 to $650 per square foot. According to the range local homebuilders have provided, high-end custom homes might cost as much as $1,200 per square foot.
A proper installation of a foundation does more than load-bearing, it also contributes to the stability of the structure. Installing a four-inch slab foundation typically costs $6.03 per square foot in Boulder. Depending on the size of the roof and the kind of shingle that will be used for the project, roofing expenses vary. A new roof will cost about $7,550 for a 1,500-square-foot home. The price to install asphalt shingle ranges from $3.70 to $6.30 per square foot.
Boulder’s weather can vary from being warm in the summer to bitterly frigid in the winter. Heating, ventilation, and air conditioning (HVAC) installation in the city ranges from $1,941 to $9,705. For plumbing, it could cost homeowners between $92 to $668. These expenses include the materials and equipment that will be used in the service; however, it does not cover the additional permits and fees. Homeowners should also take into consideration the monthly cost of maintenance for these utilities.
Soft costs are all the construction expenses that are indirectly related to the physical construction of the project. These expenses are primarily the permits, land costs, and architectural fees for the construction. Usually, these costs are to be settled even before the construction begins.
Figure 2. Soft cost percentage and average price range of additional fees, determined from the overall cost of custom home building in Boulder, Colorado.
Cost of the Land
Given the mountain landscape and great recreational activities, it is clear that land prices in this area may be higher than most in the region. In March 2021, the city recorded an average home price of $1,557,500. This is the highest median price recorded in Boulder Valley and northern Colorado.
Lands that are much closer to amenities may be more expensive than those that are located on the outskirts of the city, or vice versa. According to the listing website Zillow, the average cost of land in the area is $532,359, averaging $41.02 per square foot. Currently, the most expensive lot is priced at $2,150,000 and is located on Paragon Drive near the edge of the city. The cheapest is a $24,999 lot on Riverside Drive in Lyons.
Permits and Other Fees
To ensure the safety of the building, homeowners are required to apply for permits, which are then to be submitted to the local government for review. To apply, homeowners must first register to Boulder’s self-service portal and then find the right application form for their project.
A building permit in Boulder is issued as a general permit. This means that a fraction of the total cost of the project must be paid according to the schedule of fees stated below. Unless otherwise stated in the general permit, electrical, mechanical, and plumbing fees are also required. The schedule of fees are as follows:
Due to recent wildfires in the Boulder County, the county is now adopting new fire-resistant requirements for construction of new homes on the eastern grassy plains. According to news reports, building permits submitted on or after the 6th of June shall be required to meet the new requirements.
Architecture and Design Fees
Plans for the design of a home almost always come first. There are many aspects of the build that are tied to the design. Without a plan, contractors can deviate from the design that homeowners initially wanted for their building. According to Boulder homebuilders, the average range is about 10 to 11% of the total construction cost. This estimate may increase or decrease depending on the scope and complexity of the project.
How do the custom home building costs in Boulder compare to other nearby cities?
According to U.S. News and World Report, the state of Colorado is currently ranked as the ninth richest state in the country. With its vast landscape promoting city tourism and world-class businesses, Boulder has a fulfilling quality of life. According to the Colorado Association of Realtors (CAR), the median price of homes sold in the state in April 2022 is $600,000.
Ski resort areas, which include the counties of Eagle, San Miguel, and Routt, all have a median home price that exceeds $1 million. In addition, Pitkin is the county with the highest median home price at $6.4 million. Pitkin County is where the famous Snowmass Village is located, which hosts the largest ski-in/ski-out residences in the state.
In Boulder County, the median price of a single-family home is $975,000. Compared to the surrounding counties, Boulder has the highest median home price. The median home price in Denver County is $750,000. In Jefferson County, south of Boulder, the price is $724,110. Northern county, Larimer, has a median value of $610,000. Out of all the mentioned counties above, Boulder has the lowest median home price increase. In April 2022, it recorded a 13% price increase compared to April 2021. Furthermore, median home prices in other counties have seen at least 16% more increase than the year prior.
What Leading Custom Home Builders and Architects that Serve the Boulder Area Say
Boulder is an impressive city, to say the least. It is a great location for anyone who wishes to wake up with a view like the Rocky Mountains and basically be with nature. However, everything comes with a price.
Ryan Richards, Chief Financial Officer of Petra Custom Builders, said changes in supply and demand indicate higher new home construction prices. “Construction in the Boulder area is not likely to slow down, nor are prices likely to decrease for the foreseeable future,” he shared. “The components of demand are all high. The available land to build on is decreasing; builders have [a lot of] work in backlog (with low availability), and supply chain disruptions have been increasing commodity prices and lead times.”
As the prices in the industry change rapidly, it is becoming more difficult for homebuilders to keep up with the pace. Richards added that it takes several months to complete the construction of the house, and the current market trend guarantees an increase in the final cost. “When starting the design process and targeting a given budget, we need to assume that in six months when the design is completed, the market alone will constitute a 10% addition to the construction costs.”
Gettliffe Architecture owner Dominique Gettliffe shares similar sentiments in today’s complex property industry. Market fluctuations often affect homeowners who are planning to hire contractors for their own homes. “It is very challenging right now to project any construction cost.” She added that builders may ask to see the design first before giving any quote per square foot. Factors include the cost of materials, shortage of construction labor, and delays in both permitting and construction supplies are affecting the total cost of construction. To further help her clients in budgeting, Gettliffe is advising them to double their budget or reduce plans to meet the price increase. Although there are a lot of major increases in home construction costs, Gettliffe said that the city still has great demands for new homes.
The Future of Boulder’s Residential Construction Industry
Many factors affect a city’s housing market. One of the major reasons is its quality of life. Boulder’s overall atmosphere offers vibrant urban living while being able to come to a rural suburban area surrounded by a spacious landscape and a great climate.
With supply and demand curves changing unpredictably and mortgage interest rates on the rise, home prices in Boulder could increase further in the coming years. As the city lacks affordable housing, many residents voice their concerns about the livability of the city itself. Although Boulder has its own program on this matter, the rising cost of expenses barely covers the other bills to be able to live comfortably.
According to moving professionals, the state has seen demand for housing rise in 2020. People bought homes to accommodate the new work-from-home lifestyle. In 2022, this lifestyle continues to fuel the city’s housing market industry. A large portion of luxury custom homes in the area are bought by out-of-state buyers, specifically Californians. Among their reasons is the open landscape allowing breathing spaces and tranquility compared to the congested areas in their previous state.
A resident may work from home in the morning and be greeted with the fresh mountain air in the evening. Boulder is a small city with a considerable amount of companies and a flagship university within its limit. It is no wonder many may find this akin to exclusivity and may plan to move in. With housing affordability farther beyond its reach, Boulder may focus its attention on the luxury housing market more than any other as it is the one currently in demand.
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