How do locals afford it? (Denver, Parker: renting, insurance, mortgage)

[coloBUCKEYErado]

I apologize, I do not mean to come off as trolling. I moved to Colorado in '09 just after graduating from college. My wife and I lived in the Parker, CO area for a little over 2 years before being moved away due to a job relocation. We are trying to move back, but don't know if it is feasible.

My question is, is there some secret to how people can afford these housing prices?!?! When looking at the median household income - approx. $95k - my wife and I surpass that by a considerable margin. Yet, there would be no way we could afford a $400,000+ on a home.

Is there some type of special mortgages offered in this area? Does anyone have any advice/tips on how they make this size of a mortgage work?

[Pesare]

Actually, with a 100K+ income people usually can just get a conventional mortgage on a $400K home. The kicker here is having enough money saved up for a downpayment which most people do if they have good fiscal habits can save it on a 100K+ income. I think if you have good credit people are able to only put down 5% on a conventional loan and they can buy the home. Even with high monthly payments for the mortgage (there are some tax benefits to it) most people find it worthwhile to buy an expensive home rather than renting. On the other hand even with a 100K income I still would not be comfortable buying a 400K home and would rather save the extra money for retirement.

[flamadiddle]

Sure you could, but you may have to alter your lifestyle. The payment on $400K at 3.5% for 30 years is around $1,800 per month. Add taxes and insurance and you're payment is around $2,500 per month. Sounds like you're pulling in around $10K per month so maybe around $7K after taxes, etc.? What else do you have to pay for that puts you over $7K per month?

[emm74]

What do you consider a reasonable amount to pay for housing on an income that is "a considerable margin" above 95K?

[coloBUCKEYErado]

Well, to be specific, between my wife and I, we make $135,000 annually before taxes. However, the $10,000 per month estimate above is far from accurate. After taxes and benefit deductions, our monthly take home is closer to $7,200/month.

Now in terms of expenses, combined we have just under $45,000 in student loans and twin 16 month old children that obviously require day care. As I am sure all parents on here know, this alone is a hefty expense.

In terms of what I find reasonable, I am coming from Ohio where housing is extremely cheap relative to CO. However, I also have somewhat reasonable expectations. I was hoping to keep a monthly payment around $1600/month on a mortgage, but in my internet research, our only option at this price point is either a less than desirable area, or a home with no living space for a family of four.

Again, my intent of this thread was not to complain, rather hopefully find some solutions from families in similar situations. I appreciate all responses.

[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.

[davebarnes]

Originally Posted by coloBUCKEYErado

desirable area, or a home with ... living space for a family of four.

1. Where would your jobs be?
2. Where would you like to live? Where would you refuse to live?
3. What are the attributes of a house for 4?

[coloBUCKEYErado]

MN_Ski- can you explain some of your acronyms? I am having a hard time following your post.

Dave Barnes-
1. My wife is a teacher and would not be moving with a job but finding one once we got there. She obviously would be able to search anywhere. I however will be working in the Lone Tree/DTC area.
2. We would like to 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. By living space, we have 2 toddlers and would need space for them to play. Our house now is just over 2,000 sq ft and is enough.

[randomparent]

SFH: single family home
COL: cost of living

[emm74]

Originally Posted by coloBUCKEYErado

Well, to be specific, between my wife and I, we make $135,000 annually before taxes. However, the $10,000 per month estimate above is far from accurate. After taxes and benefit deductions, our monthly take home is closer to $7,200/month.

Now in terms of expenses, combined we have just under $45,000 in student loans and twin 16 month old children that obviously require day care. As I am sure all parents on here know, this alone is a hefty expense.

In terms of what I find reasonable, I am coming from Ohio where housing is extremely cheap relative to CO. However, I also have somewhat reasonable expectations. I was hoping to keep a monthly payment around $1600/month on a mortgage, but in my internet research, our only option at this price point is either a less than desirable area, or a home with no living space for a family of four.

Again, my intent of this thread was not to complain, rather hopefully find some solutions from families in similar situations. I appreciate all responses.

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.