Boulder Real Estate: What to Know In 2025
Boulder real estate is in a stratosphere that not many other places in the country share. Boulder, Colorado, is some of the most coveted real estate not only in the country, but perhaps even in the world. Nestled below the Flatirons and renowned for its university and open‑space alternative living ethos, Boulder presents a real estate market that is in the upper echelons of income earners in the US, and it can be complex. Despite recent cooling price trends, this close-knit city remains highly desirable, especially for investors, remote workers, and STR hosts.
In this guide, we unpack market data, tax policies, rental rules (long and short‑term), and real case studies so you can see both the context of Boulder real estate and what might be in store for 2025.
Looking to invest in the Boulder or Denver Metro real estate markets with an aim of renting it out?
Why did Boulder real estate get so expensive?
Boulder didn’t become one of the most expensive markets in Colorado overnight; it’s been a process. A process that starts at the attractiveness of its University; The University of Colorado, sometimes known as the Harvard of the West, is what the University fundamentally revolves around, and has driven the city’s growth historically. However, since the city’s early days, Modern Boulder has been the culmination of decades of deliberate urban planning, strict growth limits, and a unique mix of economic drivers.
Boulder market snapshot 2025
Let’s start with the fundamentals: what’s on the table right now?
| Metric | Value (as of mid‑2025) |
|---|---|
| Median sold price (city) | $965,000 (–2.1% YoY) |
| Median home value (Zillow ZHVI) | $992,613 (–2.7% YoY) |
| Median listing price | $1.1 M (–17.9% YoY) |
| Inventory for sale | ~826 units |
| Median days to pending | 29 days |
The Boulder market is a microcosm of the entire US, and the market has been relatively stagnant as of late. Prices have dropped a bit, listings stay on the market slightly longer, and inventory is modest but rising. It’s pointing in the direction of a potential plateau, driven by higher mortgage rates (~7%), inflation, and cautious buyers.
What’s shaping Boulder real estate in 2025?
To understand where Boulder real estate is heading, you need to look beyond the charts and graphs and see what is fundamentally driving the shape of the market. With things like macroeconomic pressure and local zoning changes, multiple forces are converging to shape today’s market and what might lie in store for tomorrow.
Affordability squeeze
With mortgage rates hovering around 7%, a $1M home now costs $6,650/month, up from under $5,000 just three years ago. That’s a fortune for most middle-class Americans to afford, even in Colorado, where salaries are generally higher than the rest of the nation. Statewide, real estate transactions are down 20%, and while Boulder is holding up better than most, it’s still cooling.
Inventory growth ahead
In 2024, Boulder lifted its residential building cap to address housing shortages. Permits are up, but new construction is slow due to zoning and community resistance. Relief is coming, but not this year.
Market cooling locally
Home prices in Boulder are down 17.9% YoY, and listings are taking longer to sell. Sellers are making more concessions, and the once red-hot market has turned more balanced, giving buyers negotiating power.
City vs. County pricing gap
Boulder’s median price is $965K, while nearby towns like Lafayette, Louisville, and Longmont average around $760K. These more fringe areas offer lower prices, lighter tax burdens, and more flexible rental rules, making them attractive alternatives for investors.
Boulder property taxes & cost of ownership
Colorado might have a reputation for being tax-friendly, but owning property in Boulder comes with its own set of cost dynamics, especially for real estate investors and prospective landlords. Between property tax rates, lodging taxes, and sales tax, there is a lot that one needs to understand before they buy.
State and local tax structure
Colorado’s income tax is relatively straightforward. The state charges a flat 4.55% on taxable income. So, whether you’re a high-net-worth investor or a first-time buyer with rental side income, that rate stays the same. Where things get more nuanced is with property taxes. While Colorado has some of the lowest effective property tax rates in the country, Boulder’s unique property values and mill levies still translate to meaningful annual expenses.
Here’s how it breaks down:
| Step | Formula | Description |
|---|---|---|
| Assessed value | Market value × 7.15% | This is the value Colorado uses to calculate taxes on residential property |
| Property tax | Assessed value × 0.072 | Applies Boulder’s local mill levy (~72 mills or 0.072) |
| Effective tax rate | ≈ 0.5% of actual market value | What you’ll realistically pay as a percentage of the home’s price |
Example: A $1M home in central Boulder
Let’s say you purchase a modern three-bedroom home in central Boulder for $1,000,000.
Here’s what your annual property tax burden might look like:
That might seem like not so much, especially when compared to places like New Jersey or California, where ridiculous tax bills on similarly priced homes often exceed $10,000–$20,000 annually. That being said, Boulder’s sky-high home values mean even a relatively low rate generates a sizable bill.
STR hosts: Lodging tax and the threat of reclassification
If you’re renting short-term in Boulder, you’ll also need to factor in the 7.5% lodging tax, which applies to the nightly rate plus any fees (like cleaning, management, or pet charges). Airbnb and VRBO collect this tax automatically, but if you’re doing direct bookings, you’re responsible for reporting and remitting it yourself to the city.
Example: STR tax load breakdown
- Booking total: $275/night × 4 nights = $1,100
- Lodging tax (7.5%) = $82.50
- Sales tax (8.5%) = $93.50
- Total tax burden = $176
The guest ultimately pays $1,276, but you’re responsible for getting that $176 to the right places, especially if it’s not collected through a platform.
Reclassification risk for STRs over 90 days/year
In 2024 and 2025, Boulder has floated proposals to reclassify STR properties rented for more than 90 days annually as “commercial property”. That would double your property tax liability by shifting you from the residential rate (~0.5%) to a commercial effective rate of over 1.0%.
Let’s break it down:
| Property Use | Effective Tax Rate | Annual Tax on $1M Home |
|---|---|---|
| Owner-occupied residential | ~0.5% | ~$5,150 |
| STR rented <90 days/year | ~0.5% | ~$5,150 |
| STR rented >90 days/year (proposed) | ~1.1% | ~$11,000 |
That’s a $5,850 difference every single year, enough to wipe out a large chunk of your STR profit if you’re operating on thin margins. It’s also why some owners are now capping STR use under 90 days and switching to mid-term stays (30–89 days) for greater flexibility and less risk.
Looking to optimize your cash flow via tax planning, dynamic pricing, and more? Book a free consultation with us!
Renting out a property in Boulder long-term
If you’re planning to rent out a property in Boulder for 30 days or more, you’ll need to follow the city’s strict long-term rental rules. That includes getting a Long-Term Rental Housing License, passing inspections, and complying with SmartRegs energy standards, even if you’re just renting a room or listing seasonally. As of mid-2025, two-bedroom units typically rent for $2,500–$3,500/month, with higher rates near Pearl Street and University Hill.
Investor scenario: What does the math look like?
Let’s say you buy a 3-bedroom condo in East Boulder for $800,000. You rent it long-term for $3,200 per month, bringing in $38,400 per year. That’s a gross yield of 4.8%, which sounds decent on paper.
But once you factor in:
- Property taxes (~$3,383)
- Maintenance and reserves (~$2,000)
- Property management or self-management time
- Licensing and inspection costs (~$200+)
Your net yield might drop closer to 3%. Still profitable? Yes, especially if the property appreciates 2% annually, but it’s not a slam dunk unless you’re also factoring in personal use or long-term value.
| Metric | Value |
|---|---|
| Purchase price | $800,000 |
| Monthly rent | $3,200 |
| Annual gross rent | $38,400 |
| Gross rental yield | 4.8% |
| Estimated property taxes | $3,383 |
| Maintenance/reserves | $2,000 |
| Licensing & inspections | $200+ |
| Net rental yield (est.) | ~3.0% |
| Annual appreciation (est.) | ~2.0% |
Short-term rentals (STRs) in Boulder
Boulder has some of the most restrictive STR rules in Colorado. If you plan to list your home on Airbnb or VRBO, here’s what you need to know, whether you live in the city or unincorporated Boulder County.
Where are short-term rentals allowed in Boulder?
In Boulder, short-term rentals are only allowed in your primary residence, meaning you must live there at least six months a year. Second homes and investment properties don’t qualify. That makes it a no-go for full-time Airbnb hosts who don’t actually live on-site. That being said, some of the surrounding areas, like Lafayette, Lyons, and Broomfield, will have different regulations.
License & compliance requirements for STR(City of Boulder)
To legally operate an STR in the city, you must:
- Follow local occupancy limits, just like long-term rentals
- Pay an initial license fee of $190 plus a $25 business registration fee
- Renew annually for $20
- Self-certify the presence of smoke and carbon monoxide detectors (no inspection required)
- Display your license number clearly on all listings and advertisements
STR rules in unincorporated Boulder County
If your property is located outside Boulder city limits but within unincorporated Boulder County, different STR rules apply. You’ll need to obtain an STR license, which costs $350 initially, with renewals ranging from $250 to $300 annually. The county makes a distinction between short-term rentals (owner-occupied) and vacation rentals (non-owner-occupied), the latter being more difficult to get approved. Only one STR license is allowed per property, and if you’re renting out an Accessory Dwelling Unit (ADU) built before 2019, it may qualify, but is limited to just 120 nights per year.
Taxes and manual reporting
All STR income in Boulder is subject to:
- 7.5% lodging tax (collected automatically by Airbnb/VRBO)
- 8.5% local sales tax (must be manually reported if you do direct bookings)
These taxes apply to both nightly rates and additional fees like cleaning or pets. If you’re booking off-platform, you’ll need to track and remit those taxes yourself.
Is Boulder a good short-term rental market?
Boulder’s short-term rental policies are designed to preserve housing stock, not to support passive income for full-time investors. As a result, the city is really only suited for owner-occupants who want to rent out a bedroom or basement suite part-time for some side income, or be comfortable with some pretty strict regulations.
If your goal is to purchase a second home or operate a full-time STR, Boulder may not be the right fit; neighboring towns like Louisville, Longmont, or Lyons often offer more flexibility and fewer restrictions.
Where to invest: Boulder neighborhoods and city comparisons
Boulder’s real estate landscape isn’t one-size-fits-all. Neighborhood character, pricing, rental demand, and appreciation vary block by block, so where you buy matters just as much as what you buy.
Neighborhood pulse
North Boulder (NoBo)
Quieter and residential, with access to trails and a growing local scene.
📈 Investor snapshot: Bought for $850K in 2023, rented long-term at $3,200/mo, sold in 2025 for $950K → ~6% annual appreciation plus steady rental income.
Downtown Boulder
Condos run $1.2M+, driven by location and lifestyle appeal.
Often STR-friendly, but high entry prices mean lower cash flow unless you’re optimizing occupancy and premium pricing.
University Hill & Table Mesa
Reliable rental demand from students and faculty.
📊 Example: A $600K 2-bed condo rented at $2,600/mo = 5.2% gross yield. After $800/mo in expenses → ~3.5% net. Appreciation is more modest here, tracking ~2% annually.
Is Boulder the right investment for you?
If you’re investing for long-term appreciation, Boulder still holds strong appeal. Limited supply, consistent demand, and progressive zoning resistance mean prices are likely to stay elevated over time. Long-term rentals, especially student housing, can be profitable if you’re comfortable managing occasional wear and tear. For STR hosts, however, the rules are strict. If you don’t plan to live on the property or want more operational freedom, nearby areas like Lafayette, Louisville, or Longmont may offer better opportunities with fewer regulatory hurdles.
Ask ChatGPT
FAQ
Can I convert my long-term rental into an STR in Boulder?
Yes, but only if the property is your primary residence and you meet the city’s requirements for STR licensing. If you’ve been renting long-term and want to switch, you’ll need to live in the home for at least 6 months out of the year. STRs also require a separate license and are subject to occupancy and tax rules. Investment properties do not qualify.
Do Boulder landlords have to follow SmartRegs for mid-term rentals?
Yes, SmartRegs energy efficiency standards apply to any rental over 30 days, including mid-term (1–6 month) leases. This includes requirements around insulation, HVAC efficiency, and lighting. Landlords must pass a SmartRegs inspection or show compliance via upgrade documentation before obtaining a long-term rental license.