How do you guys afford to live in Denver? (Highlands Ranch: sale, rental market)

[emm74]

per another post, OP has a household income between 150K and 180K per year. He can afford to live here, he's just spoiled from currently living somewhere with very low housing costs and can't wrap his head around the fact that is not what it costs to live here in Denver.

Obviously, plenty of people can afford to live here, that's why it's so hard to buy a house or find a rental.

[Azure Ray]

I'm moving to Denver in the next few months for a new teaching job - I'm wondering if I can make it there by myself only making about $50k/year! I'm used to paying about $500/month for rent...lol. I know this will be a shock on my bank account, but I want to be in Denver, so I'll have to make ends meet! I may have to switch back to Ramen and PBR.

[emm74]

Originally Posted by Azure Ray

I'm moving to Denver in the next few months for a new teaching job - I'm wondering if I can make it there by myself only making about $50k/year! I'm used to paying about $500/month for rent...lol. I know this will be a shock on my bank account, but I want to be in Denver, so I'll have to make ends meet! I may have to switch back to Ramen and PBR.

You may have to up the rent budget a little bit but if you can find a good roommate/houseshare situation, you can make it work.

[rumline]

Originally Posted by step33

Speaking only for myself, we bought this house a few years back and during the search process, we based OUR numbers on having just one income make that payment. We were qualified for well over double the mortgage we took out, but had other things we wanted to spend money on besides the house payment (like kids. Our daycare bills are/were more than the mortgage).

Since we both have good jobs, it certainly makes that % of income figure pretty low on the housing costs.

Now, I'll also note that when I see $2k-$3k plus for a 2 bedroom APARTMENT - I think that's crazy. I don't spend that on a 3000 sq ft house in a nice neighborhood on the west side of town. Low interest rates the past few years certainly worked in our favor. As did not having done any of our home purchases at a peak in the market.

I feel bad for those out there looking for a place right now - houses in my neighborhood are at least $100k more than they were 5 years ago - if you can even find one for sale. Good for me - bad for those looking to buy.

Thank you for the feedback. I definitely am feeling the bolded part right now! Well, we rent currently, but the sentiment is the same.

Originally Posted by DenverBound41

Yes, probably some of both. We make over double the median income and we are currently buying a house right at the average home price in Denver...but that won't put us very close to 20% (actually closer to 30%) post-tax. Our current house was purchased in 2010 and that mortgage does equate to a decent amount below 20% (about 13%).

You sir bought at the correct time! But thank you for providing the additional details; it makes me feel better about what I'm finding out there.

Originally Posted by randomparent

I didn't say we spent 30%; I just said that was the advice. Here are some real numbers from our past. In 1998, we bought a house in Northern California for $225k on an income of $87,500. We put down a little more than 20%, leaving our mortgage at just over $1600/month. That amounted to 22% of our gross annual income at the time.

I didn't mean to imply that you did spend 30%, I was just remarking that I thought 30% of gross is more than adequate but I can't see a path for me to get to 20% of net income in the current market.

[davebarnes]

Annual AGI = 100%
Mortgage = 0.0%
HELOC = 7%
Insurance = 1.1%
Taxes = 4.7%

So, 12.8%
Be old and have saved a lot.

[Willy702]

I think some people worry too much about these ratios "experts" tell them to abide by. Lots of people can get by spending 50% or more on housing. It may not be ideal, but we are talking about millions of people who manage to do it. Some fall behind, but most doing it find a way. I doubt too many resort to just eating ramen and living in the dark either.

[redguard57]

I don't know what it is about C-D that attracts quite affluent posters.

The last survey I saw on the subject came out in 2014 and reported that 26% of homeowners and 49% of renters spend more than 1/3rd of their income on housing. Millennials make up the hardest-hit cohort since they have student loan burdens and lower incomes.

[BarryK123]

Originally Posted by ayoitzrimz

As a comparison I asked my buddy how much he is paying - $5400 a month for a 2 bedroom in Williamsburg. For those that don't know Williamsburg isn't even in Manhattan! It's right across the bridge, in a gentrified area that was unwalkable 10 years ago.

When my daughter was in college in NYC, we paid $2000/mo for a 300 (yes, three hundred) sq ft studio in East Village (that is Manhattan). It was a dumpy building, no elevator, and she was on the 5th floor.

[Greentea323]

My husband and I grew up in Denver (Well, Highlands Ranch for him). We are very frugal, have no debt, one child, excellent credit, education, and he is steadily employed in IT.

While we were spending $1200/month on rent, and that was doable with the recent increases we no longer can afford to live here. We tried buying but were quickly beat out by cash investors almost every time we made an offer and at 20-30k over asking.

Instead of struggling to afford Denver, we've decided to move to the Phoenix area. My husband can make the same and we can afford a much nicer house with %20 down. I will also be working there, and preschool is almost half the cost of Denver centers.

Many of our friends (under 30) have fled for TN, TX, CA because they cannot afford the Denver they grew up with. The ones staying here bought a few years ago, had parental help with a down payment, use cheaper in home childcare, rent with others, or have a spouse making $100k+. I've talked to several people spending over 1/2 their take home pay as well.

I hope that helps. I guess those who want to stay make it work. We're not invested in doing so, so we're leaving.

[SkyDog77]

Is the point of this thread really finding out how people afford Denver or is it to find out how people afford Denver on the same amount of money you're making with the same amount in savings? I would guess the latter is more of what matters because do you really care how someone making $500,000 a year affords Denver?

If this is the case I think these thread would be much more useful if you would say, are people able to afford Denver making $x a year with $x amount in savings. I understand not wanting to divulge too much personal financial information, but if you want a realistic assessment, more I for on the particular situation you are facing is better.