How does one afford Boulder, Colorado? (Fort Collins: mortgage, bankrupt, to live in)

[CAVA1990]

Originally Posted by Brain Drain

It's very simple to adjust your taxes so you're benefiting from the mortgage interest deduction, the property tax deduction, and mortgage insurance deduction throughout the year, not just when you get an oversized refund. How do you do this? By lowering how much is withheld from your paycheck.

Thanks for saving me the trouble of having to write all that. What happened to the concept of struggling a little when you're a new homebuyer and then getting more comfortable as your income grows and your house payment stays flat? That's how it works for most people. Especially if you're young, you'll get a promotion or two or change to a better job and your house payment will become a much smaller percentage of your income.

[WhereTheSidewalkEnds]

I didn't really know that was a concept. We always had a name for that - house poor.
When we first moved to the area, we were preapproved for a loan well above what I thought was reasonable. We didn't want to be house poor. I'd rather have a smaller house and not be scraping by all the time.
Good thing we did that because my husband's company was doing pay freezes, etc.
I would not want to buy a house on the hope of getting promotions and more pay....
Just my opinions obviously. People have different comfort zones when it comes to what risk they are willing to take.
As far as adjusting taxes - I think it's something many do not do, but I will have to say, we have always done. I think there is even a worksheet provided by the IRS to be able to take all those things into consideration.

[qfrost]

That's good information. Thank you. I admit I knew the argument for not getting a refund. But calculating it when both my wife and I both change jobs at least once a year, is nearly impossible. I suppose if we were in stable '9 to 5' jobs in careers where 'staff employee' really means long term employment, it'd be easier. That said, I will have to take what you've suggested and look again at how we do things.

I would caution anyone buying more house than they can comfortably afford under their current salaries.

[Brain Drain]

Notwithstanding the mechanics of lowering your tax withholding, I think your point is sound about not overstretching financially. Boulder is filled with people who have $600,000 houses and yet haven't saved much for retirement. Yet when asked if they plan to move to realize their investment, the recognition comes that they are sitting on a $600K use asset not an investment. An investment must be sold for a gain or generate income. If you're holding on to your house forever and never plan to sell, it's doing neither of those things.

Truthfully I've seen many people come here with a dream and not be able to keep up financially. There is a segment here that we joke about but that is genuine -- some have high salaries but a sizable number have inherited wealth. Trustafarians are not are not just the people hanging out by the creek. It may be great to live here, but if you're stressed financially it's hard to enjoy anywhere.

Not only does you housing cost go up when you move to Boulder, but you also "benefit" from the Boulder tax. Everything seems to cost a little more here than the surrounding environs. Perhaps it's because commercial leases are higher and wages must be higher to support the higher cost of living. Maybe people feel the market can bear it here better than other places.

I liken Boulder to a candy store -- there's so much to do here. Some of it is free while other things cost money. You see what your peers spend (or perhaps the peers of your children), and it changes your frame of reference for what is normal. Children can enroll in hockey lessons, gymnastics with a team that sends children to the National Team every year, get trained by former professional soccer players, join a running club with former world champions, go to upscale adventure camps, etc. It's out of hand everywhere but Boulder puts the cherry on top.

Luckily Boulder does embrace the old beat up Subaru, which is driven by many a millionaire.

I wouldn't move to Boulder for a sound financial life, but perhaps in spite of it. Lac Amora in Broomfield (not new 4000 sq ft homes part) would probably be better from that standpoint as would parts of Arvada and Westminster. Louisville, Superior, and upscale parts of Lafayette are more toward the expensive camp.

[rhodan653]

Originally Posted by CAVA1990

Thanks for saving me the trouble of having to write all that. What happened to the concept of struggling a little when you're a new homebuyer and then getting more comfortable as your income grows and your house payment stays flat? That's how it works for most people. Especially if you're young, you'll get a promotion or two or change to a better job and your house payment will become a much smaller percentage of your income.

Sorry, but it is just this kind of thinking that lead many people into the disaster that is our current housing crisis. No, people shouldn't have to "struggle" as new homebuyer. Hoping you will get a promotion so you can afford furniture is a dangerous game when the opposite just as likely a result: you lose your job and are out of work for a couple of months and the next thing you know you are foreclosed on and your credit is ruined for years. Best case is you are stuck in your lovely empty house eating Ramen noodles and wishing you could go on vacation once in awhile.

I make a fair bit more than the $110k cited above and I sure as hell wouldn't feel comfortable spending $400k on a house and as a CPA, I think I understand the numbers very well along with all of the tax "benefits" and I use that term loosely. I applaud the OP's restraint and think a lot more people need to exercise some. We seem have a fixation in this country on needing a ridiculous amount of space in a house. The reality is that you can easily raise two kids in much less than 2,000 sq ft and to run the risk of bankrupting yourself so you can have a bonus room and granite countertops is crazy.

[qfrost]

'Hoping you will get a promotion so you can afford furniture is a dangerous game when the opposite just as likely a result'

At least in my field I've noticed that we have less and less true 'staff' positions, which can really ruin your ability to run a budget. Although I've lived in many a tiny house, I disagree with the idea of not needing more space. If you're talking McMansions, then yes, I agree. But our family of three needs a dedicated office and a dedicated artroom.

I'm sure most families would need some reasonable space besides the usual bed/bath/kitchen/livingroom basic you get in a tiny house. But sure, buying more than you can afford is foolish in any environment.

[JuanAntonioGonzalo]

You can't complain about not being able to afford a house in Boulder, Malibu or Manhattan. There are millions of rich people in this country, just read the U.S. tax data. They live there.
I have to add that I agree with a few of the opinions above- now is a horrible time to buy a house. No one is making money on property for a long time, including Boulder.

[skanman7]

houses at the high-end $1.5 to 2.5 million (not the super high-end) are moving about as expeditiously as the flatirons. one broker told me (off the record) she had a listing at $1.95 million...and the best bid they got in 6 months for the house was 1.4 million.

bottom line....there is a huge chasm between what sellers want/expect/demand...and what buyers are willing to pay.

[Dixie88]

my husband & I lived (renting) in Boulder 1982-1999 with 3 & 1/2 heavenly years in Gold Hill. Unfortunately, I had a bad car wreck (ice, tire flew off, nearly went over cliff, bad head injury) so we had to move where I could ride the bus (no longer allowed to drive). Boulder is lovely but very few people who make under $200,000/year can afford it. We are happy in Longmont. We own a small house, it is near bus lines, my husband's drive to work in Boulder is about 35 min. We make far, far less than you & your wife so maybe you could find a place. We tried for 5 years to find a house in the mountains or Boulder we could afford. No way for us. Best of luck!!!

[ZeroTiger]

There are a few neighborhoods that aren't too bad. Try Martin Acres in South Boulder. Boulder is expensive, but if you live simply and recognize that you don't need a 3000 sq ft house, there is quite a bit out there for under $400K
Our combined income is less than $100K and we found a nice deal.
You can also check out Nederland and some spots just outside of Boulder County west of Boulder. prices start dropping pretty quickly once you leave the County. That said, Longmont is one of the best deals in the county.