Is Denver property pricey? If so why? (apartments, foreclosure)

[lycos679]

Originally Posted by davidv

First of all, price has everything to do with supply and demand and absolutely nothing to do with population size.

The average price in Vail is almost $600k, and its population is only 5,200 people.

Denver is perceived as a desirable city in which to live. Read the C-D board. People want to move here. Many are willing to make the move without a job, and they hope something will materialize.

Sure, but small populations usually means there is room for housing to expand, at least in the southern and western cities anyway. That's why I asked if the price was just due to lack of housing supply or increased demand.

[davidv]

Originally Posted by lycos679

Sure, but small populations usually means there is room for housing to expand, at least in the southern and western cities anyway. That's why I asked if the price was just due to lack of housing supply or increased demand.

Supply follows demand, not the other way around.

There is room to expand, but if there is no demand, then no expansion will take place.

Cheyenne, WY, has a lot of room to expand, but it has grown slowly because of lack of demand.

Right now, there is a flood of building and growth in the Denver Metro area because of the demand; it is just that people can move in faster than housing can be built. This phenomenon can be seen in North Dakota where housing prices and rent have gone through the roof.

[Willy702]

Originally Posted by lycos679

Sure, but small populations usually means there is room for housing to expand, at least in the southern and western cities anyway. That's why I asked if the price was just due to lack of housing supply or increased demand.

There is plenty of land around, but there is no way builders could sell enough homes where the land is to make home prices moderate. The areas where the land is being utilized for new homes are in areas where current homeowners are not interested in buying so it is not a comparable product for pricing reasons and for the most part is selling closer to actual cost plus some markup. Infill projects are selling for a lot more while utilizing a lot small lot size, most likely yielding much great profit for the builder.

I just looked at some houses out at High Point, over by the airport and then another project at Stapleton which is only about 8 miles away, or as a salesperson would probably point out just 3 train stops further once the DIA train is running in 2016, but in the more desirable direction towards downtown and in a more desirable part of Denver. A pretty similar home of 1600 sf with 800 sf of unfinished basement sells for a base price of $235k in High Point and $375k in Stapleton, with the High Point home coming with a lot size about 50% bigger.

Design, neighborhood, neighbors, etc. are all different of course, but if you look at just the basics of cost to build a home and then what they are selling it for, you can see how demand is really driving the price for infill project where there is a finite number of homes they can sell. Out around High Point where they could build another 10,000 homes in the next month and not even make a dent in the land supply. Since the builders are in no real hurry out there, the conclusion is there is no way all the open land can affect Denver's resale home prices. Therefore its quite simply a question of demand, even if temporarily supply of homes for sale is low for the time being. People want to live close to the center of action and will pay a premium to do so. The new construction on the fringes and the infill projects are helping to absorb the increased population and will continue to do so, but adding new supply is not a path to bringing prices down to levels seen in other markets.

[ShampooBanana]

Originally Posted by lycos679

Denverites, I'm curious, is Denver property pricey? If so why? Is it simply a lack of housing supply? Increased demand? I was looking on Trulia and it seems that most housing is $300-$400K for an old 2000 sqft house, which isn't that bad, but Denver's population is only like 500/600K. The median price in Chicago is $30K less, but we have less space to move out and 2.2 million more people. What gives?

Inquiring minds want to know.

Thanks.

Yes, the median price in Chicago might be 30k less, but the housing stock below that median is a LOT less desirable, and includes some real slums in the worst neighborhoods there. Also, keep in mind you are paying about 2-3 times the amount in property taxes in Chicago.

Note: Lived in Chicago 30+ years. Now live in Denver.

[Bideshi]

There are jobs there. That means high housing prices.

[Floraessence]

Denver is so saturated right now. There are some like 20,000 new people moving there, all between the ages of 24-35 I read. I am from there and it has changed sooo much, just in the past 5 years. I almost don't recognize it. A lot of people like the Mile High City...it's a great place to be, the marijuana laws are a plus and it is progressive. Yeah, Denver is starting to remind me of the Bay area, San Francisco. I was thinking of moving "home" to be closer to my family, and I checked out places to rent, and the prices were ridiculous, and I've changed my mind. If you are an average American trying to make things work these days....Denver just isn't the place to be anymore, along with San Francisco. I looked at a very very decent apartment in what used to be considered very fair area to live in and she said there were 6 applicants on the apartment already.

Good luck!

[denverian]

Originally Posted by Floraessence

Denver is so saturated right now. There are some like 20,000 new people moving there, all between the ages of 24-35 I read. I am from there and it has changed sooo much, just in the past 5 years. I almost don't recognize it. A lot of people like the Mile High City...it's a great place to be, the marijuana laws are a plus and it is progressive. Yeah, Denver is starting to remind me of the Bay area, San Francisco. I was thinking of moving "home" to be closer to my family, and I checked out places to rent, and the prices were ridiculous, and I've changed my mind. If you are an average American trying to make things work these days....Denver just isn't the place to be anymore, along with San Francisco. I looked at a very very decent apartment in what used to be considered very fair area to live in and she said there were 6 applicants on the apartment already.

Good luck!

It seems to me like they're building an awful lot of condos/apartments in central Denver these days. I guess the development still isn't keeping up with demand.

[CHI-SF-DEN]

Originally Posted by denverian

It seems to me like they're building an awful lot of condos/apartments in central Denver these days. I guess the development still isn't keeping up with demand.

I agree, but from the looks of the continued building downtown, I imagine several of these newer builds will hit the market around the same time. Will be interesting to see if all the new supply in LoHi, LoDo, Ballpark area, and the Commons Park area helps absorb some of the demand, and helps ease the burden on some of the other surrounding neighborhoods to the east and west like Highland proper, Cap Hill, Uptown...

[downtownnola]

I used to live in Denver and relocated to Chicago last Fall. The high housing costs in Denver is one of the things that ultimately drove me away. My rent in Chicago (in Andersonville) is just slightly higher than what I spent in Denver, but my higher salary in Chicago more than makes up for the difference. In addition, I take public transportation to work in Chicago, which saves me a large sum of money that I used to throw away on car-related expenses.

Denver was a great place to live, but I no longer consider it affordable.

[woob]

Originally Posted by CHI-SF-DEN

I agree, but from the looks of the continued building downtown, I imagine several of these newer builds will hit the market around the same time. Will be interesting to see if all the new supply in LoHi, LoDo, Ballpark area, and the Commons Park area helps absorb some of the demand, and helps ease the burden on some of the other surrounding neighborhoods to the east and west like Highland proper, Cap Hill, Uptown...

All of these new buildings are rentals. There is hardly any for-sale apartment construction in denver.

Denver was an incredible bargain 5 years ago compared to the coasts. But the secret is out now and housing costs have risen accordingly.