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Boulder Realtor Scott Franklund used to imagine upping stakes and moving his real estate operation to some ‘destination city’ like Santa Barbara, Aspen or La Jolla — a place that people with money wanted to move to whether the times were good or bad.

Now that’s happened, he says; he’s living in one.

Since the first of the year Franklund, with Coldwell Banker Previews at 28th and Canyon, has closed 12 sales and has four more under contract at an average price of $1.625 million each; on track to 30 deals over the year. “I’ve been involved in seven or eight bidding wars since January,” he recalled, adding that recent buyers have come from as far as London and Dubai.

One deal last month: a small 1890s bungalow in Mapleton Hill a few blocks from Pearl Street, under historical district remodeling restrictions and accompanied by absolutely no warranty from the seller. Price at sale: $1.65 million.

“It’s ridiculous,” Franklund reflected over light freddos at Peet’s Coffee in the new 29th Street Mall. By summer last year, he recalled, he was seeing signs that the oversupply from 2008 and 2009, including the dreaded ‘shadow inventory’ of properties headed for default, was being absorbed.

Now that’s very apparent – even glitzy loft projects off Pearl Street that had come on that market at exactly the wrong moment, absorbed or favorably rented off. Meanwhile, he adds, homeowners who owned $750,000 homes when the downturn arrived are now seeing sales upward to $1 million – creating the possibility, by applying their equity and today’s even lower interest rates, of making a move to $1.4 million at roughly the same payment.

Franklund attributes part of that success to a cascading synergy within the Boulder area’s business climate – a magnet for startups and a formula that other economic development professionals would like to bottle and sell. First you had the University, followed by IBM and the government labs; then leading to 1990s expansion of high-tech along the Turnpike and Longmont Diagonal corridors. Through the ups-and-downs, Boulder was accumulating a well-educated, creative work force that’s now become a significant lure, as people with new ideas and capital look for places to launch ventures.

The list of startup successes is growing like alfalfa – with the activity centered as much in the category of ‘healthy lifestyles’ as in tech areas like web and pharmaceuticals. In a circumference around the busy new mall on 28th, Franklund noted, commercial buildings are selling at extraordinary prices — $17 million for one sold last month that “anywhere would be $4 million,” he added. Across the parking lot, the old Applebee’s is ready for a tear-down, to be replaced by Trader Joe’s flagship store in Colorado, to compete with Whole Foods across the street and Sprouts a few blocks south; in a market so obsessed with health consciousness that nobody worries about saturation. Healthy-living startups with early successes like Gaiam Living and Celestial Seasonings have been followed by so many others that the town boasts venture capital firms devoted exclusively to that genre.

Real estate-wise, health serves as a multiplier – luring capital and new employees, but also outdoor sports celebrities with their own spinoffs, and a whole caste of well-heeled buyers who want to raise their families in a secure, nourishing environment, with good schools.

Put that allure inside the ‘Boulder Bubble’ – restrictions on building and growth that include a veritable barrier of county open space wrapping the city — and you have soaring demand crossed with a permanently limited supply, a formula for the frenzy Franklund and other agents are now seeing. Franklund, who cut his teeth in real estate working in the Bay Area, calls it the ‘oceanfront’ effect. San Francisco and Boulder share similar size limits – San Francisco about four miles by seven, cut off by water; Boulder five miles by eight, cut off by foothills and county open space. “It’s all oceanfront,” he said, waving to a vast county park crisscrossed by trails that borders his own custom home in a view-swept enclave east of the city.
One manifestation is a size-restriction on residential building limited at 4,000 square feet – fairly tight in terms of newer tract-style homes in metro Denver even to the $400,000s. “You’d think it would run people off, but it actually makes properties more scarce and valuable,” he said. One sale he noted was to a New York buyer who paid $2 million for a grandfathered 8,000-foot home, who is now carrying out a $4 million remodel of its now rare expanse.

Franklund points to a limit on Boulder’s startup momentum: As prices rise, helped along by the city’s tightly controlled growth, ventures have a hard time scaling up actual manufacturing nearby, because the real estate is too expensive to lure employees.