Buyers are paying as much as $1.5 million for burned lots near Boulder, Colorado, almost a year afte
- In late 2021, a wildfire tore through the Boulder suburbs and destroyed nearly 1,100 homes.
- Now some buyers are buying up those lots, despite the threat of future disasters.
- The prices, ranging from $300,000 to $1.5 million, also reflect the area's housing shortage.
New homes are rising from the ashes on the outskirts of Boulder, Colorado, where late last year a wildfire tore through the suburbs and destroyed nearly 1,100 residences.
A lengthy and complicated rebuilding effort lies ahead, however.
Roughly 10 months after that blaze, known as the Marshall Fire, the vast majority of the burned lots remain vacant. Owners who've made the difficult decision to sell their land have spent that time trying to nail down the price of their barren properties, particularly since homebuyer demand has slumped across the US amid rising interest rates and persistent inflation.
Recent sales offer some insight. More than 30 properties that were caught in the wildfire's path have since traded hands, according to the local multiple-listing service. The sales prices — which range from about $300,000 for typical subdivision lots to as much as $1.5 million for acre-plus properties — make it clear that at least some prospective residents and investors are willing to bet big money on a rebound for the community, despite the challenges of rebuilding and the threat of future catastrophes.
Those prices also reflect the housing shortage in Boulder County, where the median home price is around $730,000 and building restrictions, combined with a lack of available land, have choked new housing supply, local real-estate agents told Insider. That helps explain why some buyers are jumping on lots in Superior and Louisville, the suburbs in between Boulder and Denver where the fire did most of its damage, even though materials remain expensive and labor shortages are likely to extend construction timelines.
"Open space with the ability to build what you want — that really doesn't exist in Boulder County," Jennifer Eiss, a Boulder real-estate agent with Compass, said.
Eiss represented the owners of a 3,000-square-foot lot in the Sagamore subdivision of Superior that was among the first properties to be listed for sale in the wake of the wildfire. It hit the market in early February, about a month after the blaze destroyed the surrounding neighborhood of roughly 200 houses.
"It looked like a war zone in January," Eiss said. "Like a bomb had gone off. I still get goosebumps thinking about it."
Now the subdivision looks like a blank canvas, Eiss said. Burned trees and charred home foundations have been removed, and the soil has been tested and smoothed. Without similar sales for comparison, Eiss originally listed the property for $450,000. The home that once stood there could have sold right before the fire for $870,000, Eiss estimated.
Buyers were scarce, at first. But once the area had been cleared out, interest in the lots picked up, Eiss said. After several price cuts, the property sold in late September for $300,000.
"We just had to find the market, really," she said. "We were putting it out and testing the waters."
The median sale price for Marshall Fire lots that sold in the third quarter was $416,000, according to MLS data. But while sales are picking up, the demand for lots burned by the fire has been underwhelming in stark contrast to the bidding wars common to the region in the past couple of years.
Homebuilders are pouring in time and money to hasten the rebuilding effort
In a positive sign, one nearby lot in the Sagamore subdivision drew interest from three parties once the seller dropped the price to match Eiss' listing, she said. So far, most of the buyers appear to be people who plan to one day occupy a home in the area, since the prices aren't low enough for most speculative builders to make a decent margin, she said.
One exception is Homebound Technologies, a homebuilder that got its start helping homeowners in Northern California rebuild in the wake of wildfires in 2017. The company promises to save customers time and money by using technology to optimize every step of the building process.
Homebound has been working with local governments and existing residents to hasten the rebuilding effort. The company is talking to roughly 20% of homeowners affected by the fire and said it expected to work with those owners to rebuild more than 100 homes in affected areas. In the past three weeks, Homebound has started building seven such homes that are expected to take about 10 months each to complete, said its cofounder and CEO, Nikki Pechet. The company is ramping up to start 12 homes per month by the end of the year.
Homebound has also purchased at least seven lots in Boulder County since June, at a median price of $385,000, or $63 a square foot, according to property records.
"Where there are homeowners who don't plan to rebuild, and where we can make it work, we will acquire selective lots and turn them into for-sale homes that we've built," Pechet said.
Pechet emphasized that the company's top priority was working with existing owners to rebuild their homes.
"Our macro goal here is to help rebuild this community as quickly as possible," Pechet said.
One of Homebound's properties, a 3,000-square-foot lot in the Sagamore subdivision that the company purchased in August for $319,000, was marketed for sale by Sequeeta Robinson, an agent with Trelora Realty who said buyers initially didn't show much interest.
"It just took that one right investor," Robinson said.
Boulder Creek Neighborhoods, a local homebuilder, has also helped lead the rebuilding effort. The builder has roughly 70 homes under contract in areas burned by the fire, Bridgette Cole, the company's head of external projects, said.
The builder developed 10 floor plans for the rebuild, which will cost buyers $205 to $235 a square foot before upgrade options, Cole said. The biggest challenge right now is labor shortages in the area, she said.
"With the general real-estate market shifting right now, we're not really sure what to expect," Cole said.
Buyers must also reckon with the threat of future fires
Wildfires have long been a common consideration in remote Colorado mountain towns, but less so in major cities like Denver or Boulder. The Marshall Fire, however, spread rapidly across suburban areas that had been widely considered safe in the past.
Newer, more-sustainable building methods, combined with an emphasis on protective borders around homes, could help mitigate fire risks, Pechet said.
But the reality is that Coloradans face a growing threat of fires across the state. Since 2018, the state has experienced four of the five largest wildfires in its history.
"I think the feeling is that, well, I guess it could happen anywhere at this point," Eiss said.
Ulrich Salzgeber, a real-estate agent in Steamboat Springs, a small mountain town about three hours from Denver, told Insider shortly after the Marshall Fire that he was bracing for increased risk across the state, including its more populated suburbs.
"It's not a matter of if," he said, "but when we're going to get hit by a wildfire."
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