What Factors Drive the Dynamics of the Boulder County Real Estate Market?
Boulder, Colorado is home to the University of Colorado, a gateway to the pristine Rocky Mountains, and being one of America’s most frequently listed “Best Cities” to live in. As someone who has grown up in Colorado my whole life and has seen the skyrocket in popularity amongst Coloradan cities, Boulder has always been the star child among these cities. After the legalization of marijuana, it almost seemed that everyone wanted to move to Colorado and a bustling economic impact followed because of that. On the premise of economic boom, real estate is one of the many factors that are affected by such large economic changes. As a student at the University of Colorado Boulder, I have first hand experienced this effect on the real estate market seen by the decade long growth of economic activity. Myself and the colleagues I go to school with can all agree on the fact that it is extremely expensive to pay rent here in Boulder. Being a data science student I wanted to uncover what economic factors could possibly be playing a role in the dynamics of the real estate market.
I began my data exploration by trying to sort through no better place to find things on economics than from the Federal Reserve Economic Database for Boulder County. I first wanted to research a little bit more about why it feels so expensive to live in Boulder. The premise of my research with FRED began by exploring median household income data over the past decade. My findings were very consistent with the claims of higher economic activity being present within Boulder County.
The best way to interpret the following visualization of the data found for median household income is by seeing how it has grown. The U.S. median household income for reference was $74,580 in 2022. Boulder County’s median household income for 2022 was $90,237. Living in one of America’s best cities to live in clearly comes at a higher price as denoted by the data above. The trajectory of the data also points to the fact that this number is only going to continue to get larger and larger each year.
My FRED research also led me to exploring other economic factors involved with some more real estate related data. I came across some data on FRED that was about the number of newly listed houses on the market for each month since January of 2016.
The data here also speaks for itself in regard to the changing real estate market in Boulder County and why prices for rent have only seemed to get more expensive. The 12 month rolling average for the amount of newly listed houses on the Boulder County Market is in a downward trend. Through basic economic principles, when supply is lower and demand is higher (as denoted by Boulder being one of America’s top cities to live in) the price of real estate is only going to get higher. This visualization above is an excellent exemplification of how the supply of real estate on the market is decreasing in Boulder. Another important thing to note is that Boulder County’s real estate market is unique in the sense that all of the surrounding land around Boulder is annexed and zoned by the municipal government restricting larger developments of real estate and residential housing.
The exploration of the newly listed houses in Boulder County also instilled a new question in mind for me to explore. My thought process behind my continued exploration of the real estate data found within Boulder County led me to ask that if the number of new houses on the market was in a downward trend, what would that mean for the houses not on the market? Are the individuals who possess the real estate market owning their homes, renting them, and what does the broader picture of homeownership look like in Boulder? On the FRED database I was able to come across data for the homeownership rate in Boulder County.
The following visualization above actually surprised me as it shows clearly how the homeownership rate in Boulder County has dropped within the years of the last decade. In 2009 the homeownership rate was 67.7 percent while in 2022 the homeownership rate was 64.9 percent. One of my inferences from this visualization can be best described using the first visualization in my data exploration, since median household income has been consistently increasing and homeownership rate has been consistently decreasing it now takes more household income to be able to sustain homeownership in Boulder County. Although this is just a mere inference of the data that I have been able to work with, by no means have any confounding variables been considered. There could be a multitude of economic and environmental factors that could also be considered such as demographics, politics, and many more.
After making the shocking discovery above I wanted to take an even closer look at the actual number of people renting versus people who are homeowners in Boulder County. I decided that to be able to find this very specific data on the number of occupied housing units by renters and owners I needed to look at Census data. I would also like to highlight that during my initial search for these specific variables, it was a very tedious process sorting through demographic data from the Census as there are hundreds of thousands of variables to look through and sort.
Working with the initial API from the Census also posed as a troublesome task as the data collection methods across multiple years were different and not consistent. I resorted to a method where I downloaded each specific year’s dataset for S2502 Demographic Characteristics data. I then created a sorting algorithm that kept track of each year and went through specific column indexes in the data set to save specific data points. Once I iterated through the data columns and reached the 2016 data set a different index of columns were needed to be saved. As mentioned above, the data sets older than 2016 were formatted differently than the ones from 2016 and beyond so it became especially important that I sorted through the data in a more delicate manner.
The following visualization above is the data that I was able to correctly gather from the Census website for the number of occupied housing units each year in Boulder County since 2010. From 2010 to 2023 the number of homeowners increased 7,877 units and for renters it increased by 7,884. The increases stated above show that the supply of housing units increased for both homeowners and renters at a relatively fixed rate. My inference for this data affirms that the supply of houses in the Boulder County real estate market has grown at an insignificant pace considering the span of this data since 2010. Referring back to the basic economic principle of supply and demand mentioned earlier, when supply remains constant or moves at a slower pace than demand, the higher the price payed.
To wrap up my final data exploration in regards to the real estate market within Boulder County I wanted to explore the relationship between homeownership rate and the number of newly listed houses on the Boulder County market. Using the stats.linregress function on Python I was able to use the same data explored with FRED to be able to see if there was any relationship between these two variables. After putting the variables into the function I was able to get a strong R squared value of -0.30. By social science standards anything with a R squared value below -0.2 denotes a strong negative relationship between two variables. The relationship can be explained by saying that as the number of houses being put on the Boulder County market increases the homeownership rate decreases. This could be in part due to the fact that these new homes being placed on the market are going to individuals who are renting and not to individuals who are able to own a house.
My deep dive into the Boulder County real estate market sheds light on the complex dance between economics and housing trends. Boulder’s undoubted charm, close location to the Rocky Mountains and home of the University of Colorado, has led to a surge in demand making it one of America’s top cities to live in. My journey through Federal Reserve Economic Database uncovered an increase in median household income, well beyond past the national average. The real estate scene in Boulder isn’t all shining stars either with the dwindling number of newly listed houses painting a picture of supply struggling to keep pace with demand.
Even with incomes on the rise, the homeownership rate in Boulder County has taken a hit over the past decade, telling a story where affording a home requires an even heftier salary. Census data brings another interesting take, revealing a slow climb in the supply of both homeowner and renter-occupied units. Breaking the numbers down further, a stark relationship emerges — as more houses hit the market, the homeownership rates drop. It’s a trend that shows a shift toward renting over owning. The real estate market writes a narrative of economic highs, supply constraints, and changing homeownership dynamics making it more difficult to live in Boulder County.
Works Cited
Boulder County. “Boulder County Zoning — Boulder County.” Boulder County, 14 Mar. 2023, bouldercounty.gov/property-and-land/land-use/zoning/land-use-code/county-zoning.
Estimate of Median Household Income for Boulder County, CO. 14 Dec. 2023, fred.stlouisfed.org/series/MHICO08013A052NCEN.
Housing Inventory: New Listing Count in Boulder County, CO. 7 Nov. 2023, fred.stlouisfed.org/series/NEWLISCOU8013.
Homeownership Rate (5-year Estimate) for Boulder County, CO. 7 Dec. 2023, fred.stlouisfed.org/series/HOWNRATEACS008013.
The Best Places to Live in the U.S., Ranked. realestate.usnews.com/places/rankings/best-places-to-live.
U.S. Census Bureau. Explore Census Data. data.census.gov/table/ACSST5Y2022.S2502?q=renters%20in%20Boulder,%20Colorado.
US Census Bureau. “Income in the United States: 2022.” Census.gov, 12 Sept. 2023, www.census.gov/library/publications/2023/demo/p60-279.html.
