Denver salaries vs housing question (Aurora: section 8, 2014, apartment complexes)

[Lafleur]

Originally Posted by ayoitzrimz

Or we are trying to help out the have-nots who continue to make excuses and cry "woah is me" while we are kindly trying to help them with what worked for us. I know, you conveniently missed the whole working 70+ hours a week to save up bit, because you'd rather make excuses. I got you, good luck in your house search! I'm sure it's all going to work out for you

Thanks, but I don't need your kind of "help". I'll be more than happy to listen to AmFest and mic111, who have been kind enough to provide relevant advice without making false assumptions about what I'm looking for.

Thank you, AmFest and mic111, for being helpful posters on this thread.

[AmFest]

Originally Posted by ayoitzrimz

You know, what I did when I came here from NYC and wanted to buy a home while rates are low?

I got a weekend consulting job (to be fair, it is a great time to be a software engineer but maybe you have similar opportunities), got some dog walking clients, and some guitar students. Worked close to 70 hours a week (40 regular job, 15-20 consulting, rest guitar lessons and dog walking) and ended up with enough savings to buy a house at a good down payment, and have money left over for an emergency fund.

You might be surprised at what people are willing to pay for. Did it suck having to juggle all these jobs? definitely! but it's worth it now. Just keep looking for those $$$ and think of ways that you can provide a service that people will pay for. I know it sucks, I do. But it helps. You will be surprised, again, what opportunities come your way when you make yourself available to them. Is there anything you might be able to do? Reach out to a former employee maybe that might be looking for consulting services?

As per the rents starting to level out - I heard the same thing last year but nothing happened.

Having watched rental price and inventory closely for the last year, I'm pretty confident about my forecast. A beer says rents are going to level out by the end of the year. This may even happen by the end of summer when property managers realize summer didn't bring as many new residents into the city as expected. Rental prices are already comparable to Chicago, and just trail behind Seattle. This is about as high as they can go.

Property prices, on the other hand, are to anyone's guess.

Working hard for a couple of years to be able to afford a house is smart. Kudos to you!

[Pesare]

Not to go off track on this thread, but I just noticed on Zillow Market Research for February 2015 home prices were up a whopping 14.6% in the Denver Metro area which is higher than any other big city even San Francisco. The Zillow Home Value Index which includes condos and SFH is at $289,200. That means since last year we are up from around $245,000. Even the rent prices are up 10% to $1834.
This is discouraging for first time home buyers and just shows how un-affordable the market is getting for somebody making a modest income.

[AmFest]

Originally Posted by flyingcat2k

@AmFest: Your math is completely wrong on interest and taxes. You only get money equal to your tax rate back, not dollar for dollar. Also, the Gov't holds on to that money for 12 months of the year so you need to back out the interest rate you could have earned on that money IF you had it. Basically, Lafleur only gets $40/ for sending the bank and state $200/mo. Paying $200 to get $40 back sounds stupid to me, unless you are the banker.

Dollar for dollar is what you got out of my post?

Read again. And think.

If you still came to the same conclusion, explain to me how you got there.

[Lafleur]

Originally Posted by Pesare

Not to go off track on this thread, but I just noticed on Zillow Market Research for February 2015 home prices were up a whopping 14.6% in the Denver Metro area which is higher than any other big city even San Francisco. The Zillow Home Value Index which includes condos and SFH is at $289,200. That means since last year we are up from around $245,000. Even the rent prices are up 10% to $1834.
This is discouraging for first time home buyers and just shows how un-affordable the market is getting for somebody making a modest income.

It's alright. Just pay 60% of your take-home income towards rent/mortgage. At least you'll have nice views from your house, which you'll never be able to leave because you have little to no disposable income.

[farscapesg01]

Didn't quite realize this thread would turn into this...

I will say that if we were making $67k together back when we bought our first house... we probably wouldn't have. At the time, we were making about $90k-100k combined (wife was around $60k and my first real job was around $35k)... and we thought a $110k house was expensive

[AmFest]

Originally Posted by Lafleur

It's alright. Just pay 60% of your take-home income towards rent/mortgage. At least you'll have nice views from your house, which you'll never be able to leave because you have little to no disposable income.

Check this out:

Map: The salary you need to buy a home in 27 U.S. cities - The Washington Post


You do need to make more than 60k per year to afford a home in this city.

[AmFest]

Originally Posted by Lafleur

Thank you, AmFest and mic111, for being helpful posters on this thread.

You're welcome.

I went through a similar thought process when deciding whether to buy a home. I think I can step in your shoes.

[Pesare]

Originally Posted by AmFest

Having watched rental price and inventory closely for the last year, I'm pretty confident about my forecast. A beer says rents are going to level out by the end of the year. This may even happen by the end of summer when property managers realize summer didn't bring as many new residents into the city as expected. Rental prices are already comparable to Chicago, and just trail behind Seattle. This is about as high as they can go.

Property prices, on the other hand, are to anyone's guess.

Working hard for a couple of years to be able to afford a house is smart. Kudos to you!

Just my two cents on this even though rental rates are high there are some neighborhoods where the rent will keep on appreciating like Lodo, Cherry Creek, etc because of the appeal it carries for people. There are people that are willing to pay more of their monthly income or even share the same place with 2 or 3 other people to live in those areas and of course you have the UNHW people that move into those neighborhoods. Case in point, I know somebody who lives in a high rise in Lodo which is owned individually by different people and right now the rental listings if there are any available in that building are at least 25-30% higher than they were a year ago. Luckily, for him since he has live there for a few years his rent has only gone up 7%.
On average though I think in other neighborhoods that are less popular rents will stay stagnant.

[AmFest]

Originally Posted by Pesare

Just my two cents on this even though rental rates are high there are some neighborhoods where the rent will keep on appreciating like Lodo, Cherry Creek, etc because of the appeal it carries for people. There are people that are willing to pay more of their monthly income or even share the same place with 2 or 3 other people to live in those areas and of course you have the UNHW people that move into those neighborhoods. Case in point, I know somebody who lives in a high rise in Lodo which is owned individually by different people and right now the rental listings if there are any available in that building are at least 25-30% higher than they were a year ago. Luckily, for him since he has live there for a few years his rent has only gone up 7%.
On average though I think in other neighborhoods that are less popular rents will stay stagnant.

My own building went up 20% in a year before they got anywhere near full occupancy, and ended up having to drop the rate back to just 5% higher than a year prior.

I actually think it is in these prime locations that rent will stabilize first. Since I walk by LoDo and LoHi often, I've witnessed the insane rate of construction of new apartment buildings. Basically doubled in just a year, and probably quadrupled in the past 3 years. This is too rapid to be sustainable. Sure, Denver is growing fast, but it's not becoming the next Seattle or Chicago anytime soon. There are only that many high income earners nationwide that are willing to move to Denver and afford living in LoDo or LoHi.

I've recently checked inventory of apartment buildings in these two areas. The ones that are near full occupancy are those that are still partially under construction. Once the new buildings become fully available, the vacancy rate will be even worse.