Colorado. When the tech boom happened in California back in the late 1990s, Colorado became the alternative for Californians fleeing the real estate prices that were a result of the tech boom. That created a real estate boom in Colorado, and since then, the prices have slowly crept skyward, with an exception here and there.
We bought our house in 2005. At the time, it was 1,100 square feet and boasted (by Colorado terms) a half acre lot. We’d been looking in the $180,000 range all over the foothills and hadn’t found much that was acceptable. Our house was $220,000, and while it seemed overpriced even at the time, they gave us a loan on it and we’ve been here ever since.
After the Great Recession hit back in 2008, we watched the value of our house plummet to about $160,000. It’s certainly disturbing when your “starter home” looks to be more of permanent thing. We decided to stick it out and, true to form, the real estate market has rebounded. I’m not sure if it’s the legal marijuana in the state or the fracking that was happening up until recently, but we’ve entered another boom. People have decided that Colorado is a great place to live. It’s interesting, because I’m feeling less and less of Colorado’s awesomeness every day.
Rewind back to last summer. The Mrs. and I were looking around at other properties. We’ve agreed that while we can handle a small house, we need a larger lot. We like to grow things (tinyhomesteaders.com) and here on the Happy Half Acre, it’s just difficult. We’re at 8,600 feet above sea level. Plants hate growing here. Anyhow, last summer I found a place at a lower elevation that was still in the foothills that had a larger lot for $225,000; $5,000 more than we had paid for our place back in 2005. We decided to check it out.
What I found was a shotgun shack that looked like it needed to be knocked over. When I looked in the window, I saw dog turds on the floor. $225,000 for a shotgun shack with turds on the floor. I knew that the times were changing. Within a month or two, someone had purchased the house and bulldozed half of it. I was amazed.
Fast forward to this weekend. One of my bosses put her house up for sale. She recently got remarried and is moving in with her husband. She bought the house on the outskirts of Denver three years ago for $230,000. It’s on a postage stamp sized lot and is 1,800 square feet. She listed the house on Thursday at 11:00 am. Friday evening, she sent me a text saying that she had just walked by her house and it looked like a keg party. She said there were 30 people waiting outside to get into her house. By her estimates, she had over 150 showings this weekend. 150. I know places that have been on the market (in other states) for over a year and haven’t had half as many showings. She listed the house at $280,000 and expects competing bids to exceed the asking price. For a house. In the suburbs. Where you really can’t do much outside. Where a three year old could throw a rock and hit the house next door. What the heck is going on?
Warren Buffet had a saying that went something like, “When people get scared, get greedy. When people get greedy, get scared.” I’m not sure how that should be applied to our current situation, but I feel like I’m watching a bunch of sharks fight over a blood sample. Maybe it’s time to give the West a rest. Maybe it’s time to hold tight. People have been saying that there’s a storm coming for quite some time. Maybe it has already started.
- Shortly after I posted this, she sent me a text to let me know that there were over 300 showings and she had 20-30 offers on the house. Amazing!
Pax Domini Sit Semper Vobiscum,
Mike, Oscr, Hotel…..out.