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Old 06-30-2016, 05:59 PM
 
202 posts, read 197,053 times
Reputation: 32

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Hey Folks, i have never been to Colorado state, but i am planning on picking up a single family home in there for investment purposes especially in Denver area where all the IT companies and the tech hub apparently is, however i am not sure if 2016 is the right time anymore as the markets are at peak (210k lowest in 2011 to 323k in 2016 for single family homes in Denver).

I just bought a condo in Irvine CA in Jan for 550k, so i am not sure if i can squeeze in a 323k blow right now (considering i need to make sure someone else should pay my new mortgage in Denver i.e. its rental value MUST be higher than what i will shell out to a bank).

Folks, who have been in my shoes, please advice...
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Old 06-30-2016, 07:00 PM
 
214 posts, read 257,930 times
Reputation: 380
Quote:
Originally Posted by varanj_16 View Post
Hey Folks, i have never been to Colorado state, but i am planning on picking up a single family home in there for investment purposes especially in Denver area where all the IT companies and the tech hub apparently is, however i am not sure if 2016 is the right time anymore as the markets are at peak (210k lowest in 2011 to 323k in 2016 for single family homes in Denver).

I just bought a condo in Irvine CA in Jan for 550k, so i am not sure if i can squeeze in a 323k blow right now (considering i need to make sure someone else should pay my new mortgage in Denver i.e. its rental value MUST be higher than what i will shell out to a bank).

Folks, who have been in my shoes, please advice...
There are a lot of apartment buildings being built in the Denver metro. Housing prices will probably keep going up but rent prices might not go up as quickly as they have been.
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Old 06-30-2016, 08:05 PM
 
Location: Just south of Denver since 1989
11,810 posts, read 34,265,174 times
Reputation: 8926
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.
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Old 07-06-2016, 02:40 PM
 
Location: Denver, CO
760 posts, read 874,193 times
Reputation: 1521
Looks like there might be some stabilization on the way:
https://www.denverpost.com/2016/07/0...entory-denver/
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Old 07-06-2016, 03:04 PM
 
Location: Houston
204 posts, read 199,812 times
Reputation: 248
Quote:
Originally Posted by MN_Ski View Post
Looks like there might be some stabilization on the way:
https://www.denverpost.com/2016/07/0...entory-denver/
We are new to DEN and have been renting. We have an agent, but since we are still learning the area and trying to pick where we want to live, we mostly hit open houses and do not bother her. She contacted us last week to let us know that there has been a big downturn in activity, said it would be a good time to buy, and asked if we wanted her to start working more for us. Also, I shop recolorado.com regularly and I've seen more houses available, noticed them sitting longer, and am seeing more price reductions.
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Old 07-07-2016, 12:42 AM
 
214 posts, read 257,930 times
Reputation: 380
Inventory is still super low... Prices will continue to rise unless the economy tanks... Or until someone discovers there is large amounts of toxic waste under Denver.
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Old 07-07-2016, 01:18 PM
 
Location: Denver CO
24,204 posts, read 19,010,539 times
Reputation: 38265
New construction news

Quote:
The Denver housing market now offers this sobering statistic: Just 7 percent of homes under construction in the metro area will sell for less than $300,000, according to Metrostudy, a housing research and analysis firm. That means developers are putting up fewer affordable homes than ever before.

It’s “a dramatic shift in the spectrum of what we build,” says John Covert with Metrostudy.

The numbers make Denver the most expensive non-coastal housing market in the country, according to Covert, who says the average price for a new single family detached home is more than $500,000.
Denver New Home Prices Hit All-Time High, A Trend That Won't Be Changing Soon | CPR
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Old 07-07-2016, 01:56 PM
 
Location: Just south of Denver since 1989
11,810 posts, read 34,265,174 times
Reputation: 8926
Builders operate on a cost plus profit model. There is little profit with wages, and materials in the under $300,000 range. Including condos and townhomes.
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Old 07-07-2016, 02:05 PM
SQL
 
Location: The State of Delusion - Colorado
1,337 posts, read 1,184,286 times
Reputation: 1492
Quote:
Originally Posted by 2bindenver View Post
Builders operate on a cost plus profit model. There is little profit with wages, and materials in the under $300,000 range. Including condos and townhomes.
As a homeowner, I am more than happy to see my home value go up.

But this reasoning seems absolutely ridiculous. Let me make sure I have this right. 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? I mean, if this is true, Denver is going to be screwed. We already had little affordable inventory to begin with. Now that they are building new homes, they're only building for the consumers who can afford $300k+. It's not like there is an infinite supply of $100k incomes living in this region.

As per usual, the entry level and lower earning participant is being lost and forgotten in this lovely economy we have. Welcome to the "luxury" economy, where basic living has been deemed a luxury by the powers that be.
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Old 07-07-2016, 02:17 PM
 
Location: Denver CO
24,204 posts, read 19,010,539 times
Reputation: 38265
I think it's pushing it a bit to say that "living" = new construction home. As someone who built new construction, I considered it a luxury and something I paid a bit of a premium for compared to what I would have paid for resale. And I had to compromise, in order to be in my desired neighborhood, I got an attached paired home rather than a single family.

Plus for most people, new construction is often not their first home, so if they have equity they put down, they don't necessarily need a 100K+ income to afford a 300K+ house, esp. with current low interest rates.

Having said that, I think affordability remains an issue, as well as the fact that the rise in housing prices and other costs of living has far outstripped any rise in wages. And at some point, wages will need to do a better job reflecting the cost of living here, the way they do on other higher cost cities.
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