How do locals afford it? (Denver, Colorado Springs: real estate, apartments, daycares)

[coloBUCKEYErado]

Originally Posted by emm74

I appreciate that you aren't trying to complain and hopefully this doesn't sound snarky as that is not my intent. But the way people afford it is to accept that Denver is a popular place to live and if the reasons that make is so popular are also reasons why you want to live here, it's going to cost more than 15% of your annual household income for housing, particularly for something in a nice, safe, family friendly area with good schools.

Realistically, I would up your budget to about 2400 per month all in including HOA, and give very serious consideration to finding a house with a finished basement with an extra bedroom and using an au pair for childcare. I'm not sure if you've priced it out at all, but childcare is particularly high in Denver, much higher than you might expect relative to the overall cost of living.

This is not snarky at all, and I assure you, I understand this. The entire reason for my wife and I trying to move back is the outdoor lifestyle. You cannot be in Colorado and not be outside doing all the amazing things Colorado has to offer.

But, I guess that is not really what I am asking. I believe in general, we are in a fairly standard position for families that have been in the workforce for less than 10 years, i.e. student loans, childcare, still working up the corporate ladder, etc ... It is not that we need to accept $2,400 - $2600 on a home with all expenses considered, but rather, how people in a similar situation as us can afford this.

My wife and I are fiscally sound with our only outstanding debts being student loans, one car payment and our current mortgage. Based on what I imagine to be fairly standard for similar families, $2400 is not manageable. If this means that we cannot afford Denver at this time, then so be it. But I was hoping to see if there is anyone with similar circumstances that could provide insight on how they make it work.

Thanks again for all the great responses.

[Coloradomom22]

I think people afford these homes in several ways:

1) They have equity in another house and upgrade, or they cashed out from a more expensive area and are able to actually afford a lot more for the same price. For someone trying to come back to Denver it reminds me a lot of the Los Angeles area. I have a friend who left some years ago and is kicking herself for selling her house there as now they are priced out of the market.

2) They get significant assistance from family so they can put a lot of money down. You'd be surprised how often that happens.

3) They become creative with their work schedules to lower expenses as much as they can. A couple I know, she is a nurse and works 3 night shifts in a row on the weekend to avoid childcare costs.

The fact is that Denver is no longer an average, affordable city. It's going the way of other high COL places (like Seattle, Los Angeles, etc)

[Tim Tim Tim]

So, i'm in a pretty similiar spot as you. I don't live out there yet, but I plan to in the next few months and have been researching daily on how to best make it work. My income is closer to the "household average" but my wife does not work. That cuts our our child care and we also don't have any student loan dept. We do however have 2 car payments, one of which is a bit hefty.

Im not seeing ~2500 as being a doable amount either while maintaining somewhat of a comfortably quality of living and being able to save a little bit.

Im seeing houses in the southern areas that are around the 350k range that, after putting ~10% down fall just under the 2k/month range. Im going to avoid a neighborhood with an HOA if possible to save that cost.

If you can put money down, that seems to be the best thing you can do to lower that monthly cost. Hopefully you have decent equity in your ohio home that you can use to put down in Denver.

[step33]

This comes up a lot when talking to out of state friends. How do we afford it? Well, we've been here for a little while and don't know any better

And my younger friends that are just moving here basically have to lower their expectations - or stay in the midwest. You can't have a half acre lot, 3000 sq ft house, and be in a great area for $300k. Gotta trade something out. I'd say go smaller on house for sure, and look at suburbs like Littleton, Ken Caryl (along Kipling), etc. Relatively small houses, but decent yards and many places under $400k.

Anyway, the way most people I know have made it is frankly they just "did it." They moved because they really wanted to be here, and started in a less than perfect house...and turned it in to their home! Oh and ditch the car payment! Thats huge!

[davebarnes]

Originally Posted by coloBUCKEYErado

1. working in the Lone Tree/DTC area.
2. live near Parker, however, we are open to pretty much any suburb in the southern portion of Denver.
3. In a house, we are hoping for at minimum 3 bedroom/2 bath, but 4 bedrooms would be ideal. Our house now is just over 2,000 sq ft and is enough.

I just went to Redfin.com with:
$275K-$350K
3-4 beds
2+ baths
1750+ sqft

and found a dozen possibilities.

Some people like REColorado.com, but I prefer the granularity of the filters on Redfin.

P.S. The ideal day to make an offer is 1-2 days before Thanksgiving.

[IndyRC]

Originally Posted by step33

And my younger friends that are just moving here basically have to lower their expectations - or stay in the midwest. You can't have a half acre lot, 3000 sq ft house, and be in a great area for $300k. Gotta trade something out. I'd say go smaller on house for sure, and look at suburbs like Littleton, Ken Caryl (along Kipling), etc. Relatively small houses, but decent yards and many places under $400k.

If we buy, this is what I'm considering. It's just 2 of us and a dog though. Anyway, we aren't home bodies. We go out a lot to play in the mountains or whatever. So I'm thinking, why buy a big house? The only reason we need it is because we have a bunch of crap...that needs to go! I look at it like spending big bucks on a fancy hotel on vacation when you're only there to sleep! I don't want to pay that much for a house.

[guyatwork37]

OP, I think I need a clearer understanding of you learning expenses to fully grasp your concerns. At $135k on one income you should be absolute fine affording a house up to 550k. You mention student loans, but 40k of student loans is not much to be honest in today's environment (as a reference I left college with about $160k in loans). So what other recurring expenses do you have that are causing consternation?

As an example, my income is 150k annually, with about 235 a month in student loans left. We have no car payments and no other debt besides our mortgage and solar panel loan. We save about 25 percent of our income in some form of savings or investment (college funds for kids, personal savings, 401k, investments, etc). My wife stays home with the kids which it sounds like your wife will be doing to start. Now we put 20 percent down on our house (80k) due to selling our previous home for a nice profit.

So it's certainly possible at your income level unless you have some other large recurring payments that wasn't disclosed.

[High Altitude]

Originally Posted by MN_Ski

There also a lot of people upgrading/downgrading to Denver, bringing their equity winnings from other high COL areas. The majority of the population are living in higher COL areas than Denver. And now everyone in the country wants to own a SFH in Denver...so we have much further to go. Median home price could be up to 650K, and we would still have people coming in for a "good deal" in the Denver housing market.

Most people don't understand this, but it is true.

[coloBUCKEYErado]

Originally Posted by guyatwork37

OP, I think I need a clearer understanding of you learning expenses to fully grasp your concerns. At $135k on one income you should be absolute fine affording a house up to 550k. You mention student loans, but 40k of student loans is not much to be honest in today's environment (as a reference I left college with about $160k in loans). So what other recurring expenses do you have that are causing consternation?

As an example, my income is 150k annually, with about 235 a month in student loans left. We have no car payments and no other debt besides our mortgage and solar panel loan. We save about 25 percent of our income in some form of savings or investment (college funds for kids, personal savings, 401k, investments, etc). My wife stays home with the kids which it sounds like your wife will be doing to start. Now we put 20 percent down on our house (80k) due to selling our previous home for a nice profit.

So it's certainly possible at your income level unless you have some other large recurring payments that wasn't disclosed.

First off, thank you everyone for your replies. I appreciate all your insight on how you or your friends have done it.

Guyatwork37- I have disclosed everything. We have approximately $45k in student loans, one car payment, and child care. Now, to break down my monthly expenses, our student loans are approximately $550/month, our car loan is $460 and child care for our twin 16m/o daughters is $2600/month. As you can see this is approximately $3,610 in set expenses each month. So let's assume now that my mortgage in Colorado would be in the $2300 range as this appears to be about what my monthly would be. My set expenses are now $5,910. This does not consider utilities, food, gas, clothing, etc...

As I had mentioned above, between the two of us, at $135,000 we bring home approximately $7,200/month. This would leave $1,290 for all of the miscellaneous items I mentioned above, the items I am not thinking of right now, savings for our future, savings for our children's future, etc...

This to me seems awfully tight. Now I understand there are a lot of people that don't have some of the expenses my family has. When our daughters no longer require daycare, I would agree, this would be affordable, but I still have a hard time understanding how people in similar situations afford living here.

Again, I want to reiterate I appreciate all insight on how others in similar situations are able to afford this. Maybe the answer is, people are living on a tighter budget than what I would like. If that is the case, I can live with it. My intent was just to see if there is something I am unaware of. Thanks again!

[High Altitude]

It's your child care expenses. Lots of people have family to help out, a stay at home parent or a neighbor/friend that stays home and watches their kid for cheap etc....