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Old 07-07-2016, 01:20 PM
 
Location: Just south of Denver since 1989
10,904 posts, read 29,386,676 times
Reputation: 7126
Quote:
Originally Posted by SQL View Post
So, because builders haven't found a way to make home building profitable at a lower price point, buyers are forced to accommodate their bottom lines?
It's not just Denver homebuilders. Why create a business that will not allow for the profit needed to cover costs?
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Old 07-07-2016, 01:50 PM
SQL
 
Location: The State of Delusion - Colorado
1,337 posts, read 847,190 times
Reputation: 1492
Quote:
Originally Posted by 2bindenver View Post
It's not just Denver homebuilders. Why create a business that will not allow for the profit needed to cover costs?
So the only profitable home is a 2500 sq. ft. 5BR/3BA w/ attached garage, granite counter tops, stainless steel appliances, etc.? I think not. This is not about covering costs because they're struggling to stay afloat. It's about maximizing profits to the extreme. But I firmly believe that housing will cost what the market will bear; not what some builder wants it to cost so he can maximize his own profits. After all, it's not as if there's always going to be an infinite steady stream of quarter-millionaire Californians and East Coasters flooding the local RE market who can afford these McMansions.

Another reason this is BS is because for decades they were building small ranch style houses that the average person could afford. So now they can only build homes for the $100k/yr clientele and remain profitable? I call BS, BS, BS on this. It's a matter of time before the bottom falls out on this gravy train. Unless local salaries are keeping up with the rapid inflation of home values, there is not logical way that this model can sustain itself. Local salaries are not increasing at the rate that home values are soaring however. So someone please explain to me how this market will sustain itself when the average person is making around $45k/yr?
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Old 07-07-2016, 02:09 PM
 
Location: Denver, CO
760 posts, read 588,107 times
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Unfortunately, I think there will always be enough people in the 100K salary range moving here to absorb what little is being built...at least until the median home price goes up another 100-200k.
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Old 07-07-2016, 02:21 PM
 
6,528 posts, read 1,336,586 times
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Quote:
Originally Posted by 2bindenver View Post
Average price for housing in the Denver area is closer to $400,000. You can buy something for $325,000 - but there is a lot of competition.

Zillow seems to have fairly close rental "zestimates" - you can check on it.
Just saw an article that said that the average Denver metro single home SALES price is now about $444k! Wonder how much higher prices will go, or if they will decrease before next summer. Thoughts and opinons?

Average Home Price & Market Trends Report | Denver Colorado

https://www.redfin.com/city/5155/CO/Denver/home-prices
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Old 07-07-2016, 02:24 PM
 
Location: Just south of Denver since 1989
10,904 posts, read 29,386,676 times
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CalAtlantic is building new homes in the former Green Gables golf course in Lakewood - the villas start in the mid $400's the houses start in the $500's

Until the inventory hits 18,000+ homes available for sale, prices will continue to increase.
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Old 07-07-2016, 03:08 PM
SQL
 
Location: The State of Delusion - Colorado
1,337 posts, read 847,190 times
Reputation: 1492
Quote:
Originally Posted by MN_Ski View Post
Unfortunately, I think there will always be enough people in the 100K salary range moving here to absorb what little is being built...at least until the median home price goes up another 100-200k.
There's not that many people making $100k though.

According to this, the median per capita salary in Denver is around $54k.

Metro Denver Income | Metro Denver

The households that are making north of $100k are usually couples. So again, the cards are pretty stacked against single, lower (median) income earners. I feel bad for these people, because making a basic living here in Denver Metro is essentially becoming unattainable for average people (you must be above average to afford anything here). And it's not like there is any easing on the rental side. The only complexes I see being built are "luxury" complexes.

I mean, I make good money, more than I ever thought I would growing up, but would not currently pass the threshold of $100k unless my GF and I get married and combine our incomes. It's kind of disturbing to me to think that home ownership probably won't be feasible UNLESS we decide to stick together.

I'm usually pretty libertarian on these issues, but I think the government may need to step in and regulate. It'd be pretty difficult to convince me that this is not a problem that needs to be addressed.
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Old 07-07-2016, 03:15 PM
 
Location: Denver, CO
760 posts, read 588,107 times
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^ I'm in the same boat. It's possible that in a few years I'll go up the ranks in my career to hit closer to 100K, but I'm sure at that time the prices will be even further out of reach. Right now my max home purchase price is around 300K. My SO and I could easily afford a home here together, but talking him into staying here is a challenge...and now we are playing with the idea of Alaska in the next few years.

I'm starting to wonder if I should just go full remote employment, and try my luck in Cheyenne, WY.
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Old 07-07-2016, 03:18 PM
 
Location: Denver CO
21,155 posts, read 11,754,604 times
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Quote:
Originally Posted by SQL View Post
There's not that many people making $100k though.

According to this, the median per capita salary in Denver is around $54k.

Metro Denver Income | Metro Denver

The households that are making north of $100k are usually couples. So again, the cards are pretty stacked against single, lower (median) income earners. I feel bad for these people, because making a basic living here in Denver Metro is essentially becoming unattainable for average people (you must be above average to afford anything here). And it's not like there is any easing on the rental side. The only complexes I see being built are "luxury" complexes.

I mean, I make good money, more than I ever thought I would growing up, but would not currently pass the threshold of $100k unless my GF and I get married and combine our incomes. It's kind of disturbing to me to think that home ownership probably won't be feasible UNLESS we decide to stick together.

I'm usually pretty libertarian on these issues, but I think the government may need to step in and regulate. It'd be pretty difficult to convince me that this is not a problem that needs to be addressed.
What exactly do you think the government should be doing? Are you talking about regulating private industry and telling home builders what they are allowed to charge? Or about artificially devaluing the homes people already own and saying that it doesn't matter what you paid or what the market says, you can only earn X profit?
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Old 07-07-2016, 03:24 PM
SQL
 
Location: The State of Delusion - Colorado
1,337 posts, read 847,190 times
Reputation: 1492
Quote:
Originally Posted by MN_Ski View Post
^ I'm in the same boat. It's possible that in a few years I'll go up the ranks in my career to hit closer to 100K, but I'm sure at that time the prices will be even further out of reach. Right now my max home purchase price is around 300K. My SO and I could easily afford a home here together, but talking him into staying here is a challenge...and now we are playing with the idea of Alaska in the next few years.

I'm starting to wonder if I should just go full remote employment, and try my luck in Cheyenne, WY.
As I said in an earlier post, part of me likes the idea that my condo is probably increasing in value as I sit here and do nothing. But it's that "Well, it can't happen to me, because I got mine" mentality that I don't want to start embracing. Because that's when it catches you by surprise, and next thing you know, you're the one who can't afford a place.

Also, I have a lot of friends in professional fields that don't pay that much. And I feel for them, because this market that they live in is out of control. My GF, a teacher, cannot even afford to live here without several roommates. This is someone who, at minimum, needs a teaching license and bachelor's to do what she does. Is this what we want for our community? Are we a bunch of greedy real estate moguls who want to force out anyone who's not some rich overseas investor? What about our sense of community?
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Old 07-07-2016, 03:26 PM
SQL
 
Location: The State of Delusion - Colorado
1,337 posts, read 847,190 times
Reputation: 1492
Quote:
Originally Posted by emm74 View Post
What exactly do you think the government should be doing? Are you talking about regulating private industry and telling home builders what they are allowed to charge? Or about artificially devaluing the homes people already own and saying that it doesn't matter what you paid or what the market says, you can only earn X profit?
Regulations and subsidies exist in every industry across the board, and for good cause most of the time. Don't act like what I'm proposing is some novel commie-Marxist idea that is un-Murican. We're not talking about regulating luxury items here either, we're talking about basic living needs (e.g. shelter). Everyone needs a place to live, and that does include average (median) folks whether you like it or not. Take my roommate for example. All he wants is a basic apartment dwelling without all the built in luxury items (in-unit laundry, door-to-door garbage pick-up, lavish year round hot tub/pool, etc.). But it's impossible to find something in his price range ($700-$800), even in "cheap" neighborhoods like Cap Hill.

I'm more of a proponent of enticing people/entities with incentives. People/entities respond to incentives. I don't know what the best approach is, because I have a life outside of socio-economical development causes. But I'm sure that if some smart people sat down and thought about it, they could figure something out.

Last edited by SQL; 07-07-2016 at 03:36 PM..
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