slowly geting priced out (Denver, Lakewood: bank owned, for sale, real estate)

[milehighcuisine]

I am a 24 year old chef with a 21 year old wife. We are having our first son in july, and I am now looking at the housing market. I have ok credit, and hers is better. It just does not seem possibleto afford anything but a condo, and even that is stretching it. What amI missing? I currently live in lakewood, and would like to stay west, but how? I am a chef, so can make descent money in the metro area, and even better in the mountains. but with 300k on the low end(my parents sold their 3bd2ba2car manuf. home in steamboat for 325k cash in eight days), I might as well move to cali. Am i doomed to love in Kansas?

[jazzlover]

You are living exactly what I have been talking about in these forums about the affordability problems in Colorado that are being caused by people moving in with huge amounts of money made elsewhere and bidding real estate out of reach of the people who, by birth or choice, have been long-time residents of Colorado.

If you colored a map of Colorado, with counties painted red denoting places where a person making the median local income could not qualify to buy a median priced house, probably half or more of the land area of the state would be red. For the hefty-pensioned retirees moving in from elsewhere, or for the people who sold their home elsewhere and have a ton of cash to buy a home in Colorado, or for people working at the better paying jobs in the metro area, that is a non-issue. But, for young people born and raised in Colorado, especially, who would like to stay in Colorado, it is a tragedy.

I happen to think that it is sad that many young native-born Coloradans today increasingly have to make the unpleasant choice of leaving the state during their working years and hoping to return to the state of their birth to retire--if they make enough money elsewhere to afford Colorado's inflated prices. And, believe me, I know quite a number of native Coloradans who have had to do just that in the last 20 years or so, especially ones growing up in the rural areas.

[tfox]

Not sure what your range is, but a quick search for housing in Lakewood reveals that there's a fair number of older single family homes in Lakewood starting from the 160s and up. Probably you could get something reasonably nice in the 180s.

[Mike from back east]

Jazz, that's generally true, but to a lesser extent than elsewhere.

The situation is even worse in California and many states like VA, MD, NJ, NY, FL, NV, WA.

We came here to COL SPGS because housing was HALF the price of northern VA and most of the DC suburbs of MD. Prices in DC were another huge chunk higher than even the VA and MD suburbs.

Right now, CO is one of the "sweet spots" for home prices and opportunity, that's why we're here. For the house we have here in COL SPGS, we'd be priced out of most other places, including where we came from.

Back to the point of what the O.P. is seeking, my advice to milehighcuisine is to get a realtor up there in Denver and see what can be done. I think he will find a place and be satisfied with the outcome. In my life, I lived at home until 26, married, lived in apartments for 3 years before buying our first home in far western Fairfax County, the cheapest we could get and still be within 25 miles of DC's job market. If you can get into a SFH to start with, good for you, hope you can do it, but any home should work out fairly well for you. Prices have softened a bit in most parts of the country. Best of luck to you.

s/Mike

[CosmicWizard]

Mike...you hit the nail on the head! When I first moved to Virginia Beach in 1990 one of the benefits of that area was affordable housing. Even in an area of so-called affordable housing, there was no way we could have made that first home purchase without a no-money down loan using the GI Bill.

15 years later However, housing was almost as pricey as the housing in NOVA. We put our home up for sale just before the market started cooling off, so we were fortunate to receive a full price offer the 2nd day it was on the market. Even though our home tripled in value during the 15 years we owned it, we could NOT have afforded a nicer home in a nicer neighborhood because all of those homes appreciated in value too.

One of the reasons we selected Grand Junction was the affordable housing (relative) to Virginia Beach. We were able to purchase a home with twice the living space in a much nicer neighborhood for $15,000 LESS than the selling price of the home we sold in VA BCH. Making the move was a no brainer!


milehighcuisine....From my own experience I understand your struggle. Fortunately for me I had the GI Bill to help me get started. I really don't have a solution for you and I certainly wouldn't recommend joining the military for the GI Bill.


jazzlover....Wouldn't it be nice if just because we lived in a certain place ( Colorado or elsewhere ) we were immune from what's going on in the country as a whole? One thing I can't understand....just because someone was born in a certain place, how does that give a person more right to be in that place than anyone else. Supposedly we live in a free country with the right to live where we choose...and here's the catch...as long as we can afford to live there. By the way, I didn't make that rule, so please take no offense with me. Like you, I wish that we could live wherever we wanted to without the financial concerns. Maybe that will happen one day but I'm not holding my breath.

Many Blessings.....Franco

[2bindenver]

It is hard to define *affordable* - as it is a moving target. Basic economics apply.

If you cannot afford a house, what can you afford? What would be conservative a weeks combined income? That is generally used to calculate a housing payment.

Are you handy as well as creative? I saw a great brick ranch, bank owned in Lakewood for $165,000. Needs some new appliances, paint, carpet (or hardwoods refinished) and some new fixtures.

So $165,000 x 3% for a down payment (more is better) is $5,000 plus another $4,000 for closing costs. Use Chafa or other first time home buyers assistance programs...payment would be under $1500 a month, depending on credit, taxes, and insurance.

First step is to interview local real estate brokers, then get your financing in order, then look at houses, choose one, have it inspected, close on it, move in and live happily ever after.

[jazzlover]

You are right, affordability is not a birthright. Sadly, I believe we are entering an economic era where many young people will not be able to afford to buy a home in Colorado for many years, if ever. That is certainly not limited to Colorado, but because the "affordability index" here is already unfavorable in many locales, it probably will manifest itself here sooner.

For many older Coloradans, many who left the state for careers, the situation today is sort of a cruel joke. I know a lot of small town Coloradans who basically were told, "Go elsewhere to make a living--there are no decent jobs here in (name the town)." So, they took the advice, moved elsewhere to pursue their careers and raise their families away from a place that they truly loved, but could not afford stay in. Now reaching retirement, many of them can not afford to move back to Colorado because real estate has appreciated sold wildly that, in many Colorado locales, it still is unaffordable to many middle class people.

I do not know the answer is to that--if there is any answer. It's just sad . . .

[EscapeCalifornia]

House prices in the Denver metro look to be line with the national average. Yeah, there's plenty of $400K+ houses, but there's plenty of sub $200K houses too. You want to see true unaffordability? Go to the coasts. Nice, smaller, houses I saw in Highlands Ranch would easily be 3x as much here.

[vfrpilot]

House prices in the Denver metro look to be line with the national average. Yeah, there's plenty of $400K+ houses, but there's plenty of sub $200K houses too. You want to see true unaffordability? Go to the coasts. Nice, smaller, houses I saw in Highlands Ranch would easily be 3x as much here.

I have to agree. Housing costs in most of CO rose at about the rate of inflation. The costs of everything is going up, especially gas. Have you seen the cost of a new car?
Milehigh- Real estate is way more affordable here than in SoCal. You might have to rent or buy something cheaper and plan to move up in the future. We had to do that over the years. We always wanted bigger, but bought within our means not wants. Look around and be patient, it's a buyers market and I don't think it's bottomed out yet.
Good Luck and congradulations

[formercalifornian]

Originally Posted by jazzlover

You are living exactly what I have been talking about in these forums about the affordability problems in Colorado that are being caused by people moving in with huge amounts of money made elsewhere and bidding real estate out of reach of the people who, by birth or choice, have been long-time residents of Colorado.

I respectfully disagree that "equity locusts" as they're known in real estate circles are to blame. Yes, some out-of-staters are bidding up real estate, but they are only a small part of the problem. I think easy credit over the past five years, when lending standards were quite lax, is more to blame. It's a complicated issue and certainly open to debate. (And, by the way, this transplant is not bidding up housing prices. In fact, because I have cash, I'm bargaining hard and putting downward pressure on prices.)

On the positive side, housing prices in Colorado are stagnant, inventory is up dramatically, and there are many good deals to be found in the foreclosure market. An almost brand-new house up the street from me in Castle Rock just sold for about $40k under comps, coming in at ~$200K. It's small, but hardly a dump. The elementary school is great, and the views and amenities are wonderful. The house across the street is also empty, after the owners mailed the keys back to the bank and moved out in the middle of the night. They were simply in over their financial heads. It's a great house, and someone will likely get a deal when the bank puts it on the market.

So, hang in there, milehighcuisine. There is nothing wrong with renting (I am currently doing so while I look for a place to purchase, and I'm a lot older than you with two elementary schoolers to boot). Renting is better than being house poor, and a lot better than losing your home to foreclosure. Check on-line (craigslist is a good place to start) for rental houses if you have your heart set on a single family residence with a yard for your newest family member (Congratulations!). Housing prices are likely to remain stagnant for a few years, so any money you can put aside for a down-payment will give you greater buying power when your time comes. Take your time and do your research. There are many good resources available on-line that can help you. Good luck.