Any long-time Denverites worried about how your kids will make it here? (Evergreen: fit in, rent)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
This is an increasing concern of mine. Home prices are so high here, I believe Denver will be a HCOL city from now on. We've been here for 20 years and like it, but I worry about how my kids will afford to live here down the road. Anyone else? We've considered relocation many times over the years but have never pulled the trigger. I see coworkers/neighbors with older kids still living at home and/or kids moving out of state even though they don't want to, to be able to afford housing. What is your experience? Share your thoughts!
I was just discussing this topic with family the other day. I remember just 10 years ago you could get a starter home in a decent area for under $300k. Today that house is at least double that and wages certainly have not followed suit.
For a young adult entering the college phase a perfect storm needs to be achieved. First, the student needs to be able to get a college degree in an in-demand career that pays well and is able to graduate with no student loan debt. Then you'll need to bank a lot of salary to save for a down payment. Two-income households stand a much better chance with this so there's the advantage for those who get married which is another hurdle since marriage has lost favor and those who do marry do so at much older ages.
I've heard a lot of talk from people who say they'll just move somewhere cheaper. But the fact is, any area that has a good quality of life along with a good job market isn't cheap anymore, not relative to income. Sure, you can move somewhere cheap and rural but then you'd have to account for few employment opportunities, limited educational opportunities (colleges or schools) as well as higher costs (gas) to get to medical or shopping. Cheap areas tend to be depressed and often have terrible drug problems that decreases quality of life and increases crime.Then there's the issue of weather. Some "cheap" areas have high risk of natural disasters (hurricanes, tornadoes, etc) that has to be accounted for and insurance and taxes are also a consideration.
We've told our kids that we will help them as much as we can and they are welcome to live at home for free as they save up their money after college.
I was just discussing this topic with family the other day. I remember just 10 years ago you could get a starter home in a decent area for under $300k. Today that house is at least double that and wages certainly have not followed suit.
For a young adult entering the college phase a perfect storm needs to be achieved. First, the student needs to be able to get a college degree in an in-demand career that pays well and is able to graduate with no student loan debt. Then you'll need to bank a lot of salary to save for a down payment. Two-income households stand a much better chance with this so there's the advantage for those who get married which is another hurdle since marriage has lost favor and those who do marry do so at much older ages.
I've heard a lot of talk from people who say they'll just move somewhere cheaper. But the fact is, any area that has a good quality of life along with a good job market isn't cheap anymore, not relative to income. Sure, you can move somewhere cheap and rural but then you'd have to account for few employment opportunities, limited educational opportunities (colleges or schools) as well as higher costs (gas) to get to medical or shopping. Cheap areas tend to be depressed and often have terrible drug problems that decreases quality of life and increases crime.Then there's the issue of weather. Some "cheap" areas have high risk of natural disasters (hurricanes, tornadoes, etc) that has to be accounted for and insurance and taxes are also a consideration.
We've told our kids that we will help them as much as we can and they are welcome to live at home for free as they save up their money after college.
There are starter "residences" available around me in Aurora for between 300-400k. SFHs at that price point still exist although they are dwindling and will need some cosmetic work. The problem is that "kids" don't want to live in Aurora or Lakewood or Northglenn, among other places, where such options are still somewhat within reach. As long as everyone under 30 wants to live in one of a few desirable areas inside Denver limits they will stay renters, just the way it works. Same with all these transplants who move to the area and say it must be "walkable". Demand is always going to be high in these sorts of areas and pricing therefore mostly unaffordable.
With rates still so low, the payments aren't that bad provided someone can either save up a sizable down payment or use a program which allows for a smaller down payment. The 26-year old son of my friend just got an FHA loan for a house he'll do some work on for $335k. He had to have about $15k saved up to get the house and his payment all-in is about $1800. Sounds like a lot, but he makes $70k, which is not that big of a salary for a college grad with some work experience. He qualified pretty easily. I don't see it as being that difficult of a situation, but then again most kids his age would rather share a house with 4 roomates in a high demand area than own something of their own in Aurora.
There are starter "residences" available around me in Aurora for between 300-400k. SFHs at that price point still exist although they are dwindling and will need some cosmetic work. The problem is that "kids" don't want to live in Aurora or Lakewood or Northglenn, among other places, where such options are still somewhat within reach. As long as everyone under 30 wants to live in one of a few desirable areas inside Denver limits they will stay renters, just the way it works. Same with all these transplants who move to the area and say it must be "walkable". Demand is always going to be high in these sorts of areas and pricing therefore mostly unaffordable.
With rates still so low, the payments aren't that bad provided someone can either save up a sizable down payment or use a program which allows for a smaller down payment. The 26-year old son of my friend just got an FHA loan for a house he'll do some work on for $335k. He had to have about $15k saved up to get the house and his payment all-in is about $1800. Sounds like a lot, but he makes $70k, which is not that big of a salary for a college grad with some work experience. He qualified pretty easily. I don't see it as being that difficult of a situation, but then again most kids his age would rather share a house with 4 roomates in a high demand area than own something of their own in Aurora.
This is actually a very telling illustration of a high achiever with no student debt maxing out their credit to live in a hood shack. Getting paid $70K 3-4 years out of college puts him among the top 10-20% of earners in his age cohort. He probably had a more impressive college resume than most reading this. $1800/month on $70K/year is a DTI of 30.8%, which is near maxed out for what most underwriters will approve, which means he has no student debt, which means he either went to school on scholarship or had parents who could make up the gaps. $335K for a free standing house means it’s almost assuredly in a high crime neighborhood. Those are all pretty sound assumptions, but going further out on the limb, that low a down payment for a hood shack likely means that it was either an off-market deal, had an unusually benevolent seller, or had a issue that scared off investors. At current appreciation rates, this same deal will not be available to his work colleagues just a year or two younger than him.
This is actually a very telling illustration of a high achiever with no student debt maxing out their credit to live in a hood shack. Getting paid $70K 3-4 years out of college puts him among the top 10-20% of earners in his age cohort. He probably had a more impressive college resume than most reading this. $1800/month on $70K/year is a DTI of 30.8%, which is near maxed out for what most underwriters will approve, which means he has no student debt, which means he either went to school on scholarship or had parents who could make up the gaps. $335K for a free standing house means it’s almost assuredly in a high crime neighborhood. Those are all pretty sound assumptions, but going further out on the limb, that low a down payment for a hood shack likely means that it was either an off-market deal, had an unusually benevolent seller, or had a issue that scared off investors. At current appreciation rates, this same deal will not be available to his work colleagues just a year or two younger than him.
Wow you sure jumped to a lot of conclusions there, a bit bitter are you? And no 70k is not a top 10-20% of earners for someone who has nearly 5 years of experience and a degree in something in demand. "Kids" who have worked for me recently in analyst jobs got to that pay level after 2-3 years.
And stop it with the high crime nonsense assumption, much of Aurora is not crime infested. I'm sure there is more crime in the Denver hoods people pay 3x as much for housing.
Wow you sure jumped to a lot of conclusions there, a bit bitter are you?
Absolutely. I do not like seeing my peers who had the gall to not be talented at math become serfs while people who haven’t done any research wag their fingers and cherry pick cases similar to mine as a way to put their blinders on.
Quote:
And no 70k is not a top 10-20% of earners for someone who has nearly 5 years of experience and a degree in something in demand.
I didn’t claim such a thing. I claimed it was the top 10-20% of the age cohort. You added the goalposts of degree type and experience level. $70K with no student debt at 26 is definitely in the upper half of the STEM realm (i.e. the T and E in STEM), some sales and finance type jobs.
But more importantly, do you really not realize that the vast majority of people don’t have capacity for the skill sets currently “in demand”? They wouldn’t be “in demand” otherwise. A society can’t run on STEM and finance professionals alone. What happened to the idea that home ownership is for the masses, not just a specific and very rapidly shrinking subset of college graduates?
The saddest part is that we already had this discussion four years ago regarding your new hire anecdotes. You stopped talking once I presented sources. The income-to-housing cost ratio has gotten notably worse in the years since.
Assuming the new hires are 23 and 24, their salaries are 90th and 93rd percentiles respectively.
Quote:
And stop it with the high crime nonsense assumption, much of Aurora is not crime infested. I'm sure there is more crime in the Denver hoods people pay 3x as much for housing.
Simply put almost all your assumptions are WRONG.
Look up where in Aurora houses have sold for under $350K in the past month. They’re almost all in the sketchiest parts of N Aurora. Almost all of them sold over asking price if they went to market. Few have been well-maintained. Denver/Aurora hoods aren’t bad compared to similarly sized cities, but it’s still one of the roughest parts of the metro, up there with SW Denver and Commerce City. It isn’t some blind anti-Aurora stereotype to call Far East Colfax the hood.
Yeah Aurora is not on the high end of hte spectrum. Sure there are nice areas here and there but by and large its not that desirable. That said I live in Arvada and I think its gone down hill fast the last few years. The "downtown" was cute at first but now its full of bums. Downside of public transportation stops.
Wow you sure jumped to a lot of conclusions there, a bit bitter are you? And no 70k is not a top 10-20% of earners for someone who has nearly 5 years of experience and a degree in something in demand. "Kids" who have worked for me recently in analyst jobs got to that pay level after 2-3 years.
And stop it with the high crime nonsense assumption, much of Aurora is not crime infested. I'm sure there is more crime in the Denver hoods people pay 3x as much for housing.
Simply put almost all your assumptions are WRONG.
Someone's defensive. All I see from Westerner's comment are pretty solid assumptions based on the info you provided. The point isn't to take down your friend's son, who should be proud of himself. The point is to illustrate how difficult it's gotten for young people in Colorado to secure their own homes.
Those who were able to get into what's considered well-paying career paths in the range of say $70-90K are just barely stumbling through the homeownership door before it slams shut on that income range and starts pricing out the few who make even more than that. I don't see how anyone cannot at least raise an eyebrow at that.
Someone's defensive. All I see from Westerner's comment are pretty solid assumptions based on the info you provided. The point isn't to take down your friend's son, who should be proud of himself. The point is to illustrate how difficult it's gotten for young people in Colorado to secure their own homes.
Those who were able to get into what's considered well-paying career paths in the range of say $70-90K are just barely stumbling through the homeownership door before it slams shut on that income range and starts pricing out the few who make even more than that. I don't see how anyone cannot at least raise an eyebrow at that.
To live in a nice area for a SFH you basically need 2 incomes at this point in order to actually save money after purchase.
Even tech doesn't always pay that well. I know plenty of ppl in Tech in Boulder who have an hr commute to find something affordable. Louisville, Superior, Layfayette....all pretty pricey. Tech gets people in cheap to work i a cool office with free lunches.
Ironically oil and gas pay very well but the politics in the state want those jobs gone.
I’m not trying to be controversial, but I’ve lived in California in a HCOL area. In my experience, people my age (30s) tended to:
* Live with parents/extended family for a longer time
* Rent apartments/homes long term, usually with roommates
* Wait until family members pass away, and then occupy (owned) homes through inheritance.
I feel like we can look to other HCOL areas to get some clues about what may happen here.
All three of these bullets are my experience too living in the desirable parts of Chicagoland.
To live in a nice area for a SFH you basically need 2 incomes at this point in order to actually save money after purchase.
Pretty much. I'm also the kind that got lucky. Couldn't have a house in Summit but that's alright. Leadville is cool. That was 3 years ago at 26 years old; couldn't believe I did it. I were looking today, I may not be able to be in Leadville either.
My sister and her boyfriend are a few years younger than I in a mid-size Front Range city. They want to stick around, and I told her they really need to secure that if they can. They have good work and saving potential, but I worry for them a little bit.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
