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  #1021  
Old Posted Aug 10, 2017, 3:25 PM
twister244 twister244 is offline
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Originally Posted by Denver Dweller View Post
While there are aspects to this article I can agree with, I feel like the author here is making a big push for "Millennial are ready to move out to the burbs", which I disagree with. I am most likely biased, but shifting demographics and societal expectations suggest the core of Denver isn't going to cool off anytime soon. We have a ton of people moving in, and it hasn't slowed down significantly. Further, yes, millenials want to own, but that doesn't equate to a 3,000 squared foot house in Centenial. There are homes in the city a bit from the core, but still within reasonable distance to downtown. I also see TOD being a factor here as well. Maybe I am wrong and millenials will start flocking to the burbs like generations before them, but I get tired of people trying to put our generation into this expected behavior category.

Also, this article suggests the apartment market is over-saturated, yet we have seen articles earlier this year suggesting new units are being absorbed at a healthy pace. If anything, I see things shifting to condos, but the article does allude to that.
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  #1022  
Old Posted Aug 10, 2017, 4:57 PM
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Originally Posted by twister244 View Post
While there are aspects to this article I can agree with, I feel like the author here is making a big push for "Millennial are ready to move out to the burbs", which I disagree with. I am most likely biased, but shifting demographics and societal expectations suggest the core of Denver isn't going to cool off anytime soon. We have a ton of people moving in, and it hasn't slowed down significantly. Further, yes, millenials want to own, but that doesn't equate to a 3,000 squared foot house in Centenial. There are homes in the city a bit from the core, but still within reasonable distance to downtown. I also see TOD being a factor here as well. Maybe I am wrong and millenials will start flocking to the burbs like generations before them, but I get tired of people trying to put our generation into this expected behavior category.

Also, this article suggests the apartment market is over-saturated, yet we have seen articles earlier this year suggesting new units are being absorbed at a healthy pace. If anything, I see things shifting to condos, but the article does allude to that.
Millenial here, between my husband and I we earn $150k a year with next to no student loans (5,000€) and little credit card debt. I would have loved to afford anything close to core Denver, but a $500k house is simply not going to happen. Ended up in Aurora for $330k - it's 10 minutes from the A-Line (which is 17 minutes to Union Station or 15 to RINO), we're close to DTC, 30 minutes from downtown. It's not necesarilly ideal, but we got a lot of house for significantly less than a 2 bedroom one bath cottage we would have gotten into a price war over in Denver proper.

Our friends are doing the same thing btw. We're well off millenials, solidly middle class, but Denver is simply not affordable.
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  #1023  
Old Posted Aug 10, 2017, 5:18 PM
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Originally Posted by mishko27 View Post
Millenial here, between my husband and I we earn $150k a year with next to no student loans (5,000€) and little credit card debt. I would have loved to afford anything close to core Denver, but a $500k house is simply not going to happen. Ended up in Aurora for $330k - it's 10 minutes from the A-Line (which is 17 minutes to Union Station or 15 to RINO), we're close to DTC, 30 minutes from downtown. It's not necesarilly ideal, but we got a lot of house for significantly less than a 2 bedroom one bath cottage we would have gotten into a price war over in Denver proper.

Our friends are doing the same thing btw. We're well off millenials, solidly middle class, but Denver is simply not affordable.
It's a different story for me and my friends. We're at the upper end for millennials (early-mid 30's) but we all live in the city having purchased homes before things got really hot. Now we're sitting on $100k+ in increased value but can't go anywhere because you'll get much less house for the same price. A couple friends that are in the development business have capitalized on Denver's growth and have been able to "move up" into nice homes in Wash Park or Platt Park. Hardly any of us want to live in the suburbs so we'll likely stick it out until the next housing collapse and hopefully pick up something then. Either that or move to a cheaper market like Kansas City.
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  #1024  
Old Posted Aug 10, 2017, 5:52 PM
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Originally Posted by BG918 View Post
It's a different story for me and my friends. We're at the upper end for millennials (early-mid 30's) but we all live in the city having purchased homes before things got really hot. Now we're sitting on $100k+ in increased value but can't go anywhere because you'll get much less house for the same price. A couple friends that are in the development business have capitalized on Denver's growth and have been able to "move up" into nice homes in Wash Park or Platt Park. Hardly any of us want to live in the suburbs so we'll likely stick it out until the next housing collapse and hopefully pick up something then. Either that or move to a cheaper market like Kansas City.
Funny you mention Kansas City, I'm closing on my 2nd investment property there this week and the local KC folks indicate they are seeing a lot of money (and people) from Denver moving to the KC market.
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  #1025  
Old Posted Aug 10, 2017, 6:25 PM
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Children's is frequently ranked in the top 10 nationally. They split pediatric hospital from general hospitals in national rankings. Now when you get into specialties and sub specialties National Jewish is the best pulmonology hospital in the united states and has achieved a #1 or #2 ranking for nearly two decades. Craig hospital is the #7 rehab hospital and has ranked in the top ten for nearly three decades. No matter what way you look at it, health care in Colorado is improving and when the new VA hospital goes online, it will only improve the perception.
Excellent points.

Hopefully the new VA will get enough funding? In any case I suspect it will take a few years to get up to snuff. It would be great if ultimately it would become a model of VA care. Seems I recall intended cooperation with UC Health in some areas.

Which got me to wondering if I had missed any updates but no, the last one was October of last year. Hope they're finding enough interior tradesman? Pending finish is 2018.

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Since then, people have continued to project the end of the boom (some people) while others continue to be optimistic. The optimists keep building, aided by offshore money in many cases. This sounds like Denver too.
Searching me dark matter it seems over the last 12 months there's been a noticeable uptick in company moves to Denver. Nothing yuge but the diversity continues to amaze. Given the lag time from announcement to actually moving and later adding employees things should continue apace. Not the same amount of (Amazon) steroids perhaps but there are similarities.

It will be interesting to see what happens in the downtown core? Many see RiNo as an extension of downtown and the volume of projects in the hopper will keep that area humming for many years. The mix of product and density should enable RiNo to be both popular and maintain is diverse appeal. While there may be turnover I assume the demand for city life will continue.

I'm sure you'd agree that the availability and cost of capital has been good while the cost of construction creeps ever higher.
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  #1026  
Old Posted Aug 10, 2017, 6:34 PM
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Originally Posted by mishko27 View Post
Millenial here, between my husband and I we earn $150k a year with next to no student loans (5,000€) and little credit card debt. I would have loved to afford anything close to core Denver, but a $500k house is simply not going to happen. Ended up in Aurora for $330k - it's 10 minutes from the A-Line (which is 17 minutes to Union Station or 15 to RINO), we're close to DTC, 30 minutes from downtown. It's not necesarilly ideal, but we got a lot of house for significantly less than a 2 bedroom one bath cottage we would have gotten into a price war over in Denver proper.

Our friends are doing the same thing btw. We're well off millenials, solidly middle class, but Denver is simply not affordable.
If you're making 150k a year combined with little debt, then you can still reasonably afford a 500k house, even with little money down. You chose not to, and that's fine, but 150k is into the upper middle class bracket.

Denver is still affordable for those making 150k a year. Denver is not affordable to those making the median income of 65k a year especially if they are coming in with little to no savings for a downpayment.

I have actually met quite a few neighbors recently who moved from urban areas to where I am in the burbs (me included)....and pretty much across the board the reason they moved here is because of the schools. Quality of public schools (having young kids) seems to be a big dividing line for those millennials who stay in urban areas versus those who move to the bubs.
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  #1027  
Old Posted Aug 10, 2017, 7:00 PM
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Originally Posted by mishko27 View Post
Millenial here, between my husband and I we earn $150k a year with next to no student loans (5,000€) and little credit card debt. I would have loved to afford anything close to core Denver, but a $500k house is simply not going to happen. Ended up in Aurora for $330k - it's 10 minutes from the A-Line (which is 17 minutes to Union Station or 15 to RINO), we're close to DTC, 30 minutes from downtown. It's not necesarilly ideal, but we got a lot of house for significantly less than a 2 bedroom one bath cottage we would have gotten into a price war over in Denver proper.

Our friends are doing the same thing btw. We're well off millenials, solidly middle class, but Denver is simply not affordable.

I suppose we each have to decide "what we can afford." But at least one website I found suggests that the lender rule of thumb is that housing shouldn't be more than 28% of monthly income before taxes. Annual income of $150,000 equals $12,500 per month and 28 percent of that is $3,500. A 30 year mortgage for 500k at 3.5% is $2,200 per month. Thus, at least applying the 28% rule (and considering you have almost no other debt), it would seem you could indeed "afford" a $500K home under this standard. (I get it that, your idea of what you can afford might not align with a lender is willing to lend you).
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  #1028  
Old Posted Aug 10, 2017, 7:27 PM
mishko27 mishko27 is offline
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I suppose we each have to decide "what we can afford." But at least one website I found suggests that the lender rule of thumb is that housing shouldn't be more than 28% of monthly income before taxes. Annual income of $150,000 equals $12,500 per month and 28 percent of that is $3,500. A 30 year mortgage for 500k at 3.5% is $2,200 per month. Thus, at least applying the 28% rule (and considering you have almost no other debt), it would seem you could indeed "afford" a $500K home under this standard. (I get it that, your idea of what you can afford might not align with a lender is willing to lend you).
$2,200 doesn't sound all that bad, but add mortgage insurance (currently $400 a month for us, not sure how it's calculated), and property taxes and you get to $3k easy. We could afford that, I guess, but it would be pushing it considering what we aim to save... As you said, it's all pretty personal and at the time (I guess we earned closer to 120 then), it didn't seem affordable to us.

Regardless, as it's been said above, for people with median income, Denver is completely out of reach. We need more condos...
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  #1029  
Old Posted Aug 10, 2017, 8:06 PM
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Originally Posted by mishko27 View Post
$2,200 doesn't sound all that bad, but add mortgage insurance (currently $400 a month for us, not sure how it's calculated), and property taxes and you get to $3k easy. We could afford that, I guess, but it would be pushing it considering what we aim to save... As you said, it's all pretty personal and at the time (I guess we earned closer to 120 then), it didn't seem affordable to us.

Regardless, as it's been said above, for people with median income, Denver is completely out of reach. We need more condos...
Jesus, MI is a rip-off. I'd either save enough for a large enough down payment to avoid it or do 4 years in the military for a VA loan.
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  #1030  
Old Posted Aug 10, 2017, 8:27 PM
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Originally Posted by EngiNerd View Post
If you're making 150k a year combined with little debt, then you can still reasonably afford a 500k house, even with little money down. You chose not to, and that's fine, but 150k is into the upper middle class bracket.

Denver is still affordable for those making 150k a year. Denver is not affordable to those making the median income of 65k a year especially if they are coming in with little to no savings for a downpayment.

I have actually met quite a few neighbors recently who moved from urban areas to where I am in the burbs (me included)....and pretty much across the board the reason they moved here is because of the schools. Quality of public schools (having young kids) seems to be a big dividing line for those millennials who stay in urban areas versus those who move to the bubs.
The idea that you can't get a good education in the city is a joke. I bet a lot of those parents probably (wrongly) equate diverse schools with poor education.
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  #1031  
Old Posted Aug 10, 2017, 8:53 PM
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When I hear that people are thinking of moving to less expensive cities like Kansas City to be able to buy a house and that people are buying multiple investment properties in such cities I really think that a housing downturn is just around the corner. This is exactly what happened in the early 2000's, especially in Arizona, Nevada, Sacramento, etc. Also, if you are thinking of moving to Kansas City or Chicago you should get a load of the pathetically low salaries they pay in those cities. I could be wrong, but I don't think prices in Denver are going to go up any more and they are likely to drop by as much as 20% by say 2019. I don't think I would be buying a house now since we are at the top of the market. I did that in 2006 and was underwater for years. But, if you can comfortably afford it and plan on staying in that house for ever it will work out in the long run. You need a place to live right? I definitely wouldn't be buying that "starter home" right now. Also, the strong economy we have right now wont last forever. They never do. It will loose steam sooner or later. Everyone but the realtors (and apparently the Federal Reserve) believe that the slowdown, or even a recession, will start at the end of this year.
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  #1032  
Old Posted Aug 11, 2017, 4:03 AM
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Originally Posted by mishko27 View Post
$2,200 doesn't sound all that bad, but add mortgage insurance (currently $400 a month for us, not sure how it's calculated), and property taxes and you get to $3k easy. We could afford that, I guess, but it would be pushing it considering what we aim to save... As you said, it's all pretty personal and at the time (I guess we earned closer to 120 then), it didn't seem affordable to us.
The portion of a home payment that's principal is another form of savings. Very leveraged savings....you can lose it if you sell in a down market, but it's also common to earn more equity in a year than your combined home-related costs.
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  #1033  
Old Posted Aug 11, 2017, 7:51 AM
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Originally Posted by mhays View Post
The portion of a home payment that's principal is another form of savings. Very leveraged savings....you can lose it if you sell in a down market, but it's also common to earn more equity in a year than your combined home-related costs.
Wait... unless you're doing a 15 year amortization... I assume you're familiar with the amortization schedule for a 30 year loan.

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When I hear that people are thinking of moving to less expensive cities like Kansas City to be able to buy a house and that people are buying multiple investment properties in such cities I really think that a housing downturn is just around the corner. This is exactly what happened in the early 2000's, especially in Arizona, Nevada, Sacramento, etc. Also, if you are thinking of moving to Kansas City or Chicago you should get a load of the pathetically low salaries they pay in those cities. I could be wrong, but I don't think prices in Denver are going to go up any more and they are likely to drop by as much as 20% by say 2019. I don't think I would be buying a house now since we are at the top of the market. I did that in 2006 and was underwater for years. But, if you can comfortably afford it and plan on staying in that house for ever it will work out in the long run. You need a place to live right? I definitely wouldn't be buying that "starter home" right now. Also, the strong economy we have right now wont last forever. They never do. It will loose steam sooner or later. Everyone but the realtors (and apparently the Federal Reserve) believe that the slowdown, or even a recession, will start at the end of this year.
Interesting thoughts. For now it would take at least a gray swan to cause much damage. Fair to say though that they don't ring a bell when that's about to happen.

The RE in AZ, NV and FL were yugely overbuilt including large tracts of starter homes. Nothing even close to that today.

Don't care for Chicago. The state is one downgrade away from junk bond status. Chicago doubled their property taxes which solved a part of their financial problems. Cranes aplenty with nice tall boys being built downtown so Rahm has done a nice job of securing the status of the core city.

I could like the risk in K.C. though. The upside isn't as assured but that's why it may be a good buy. Buy low and sell high is never a bad strategy.

It will take a fairly nasty recession to drop prices in Denver by 20% I'd think; 10% sounds more realistic. Ofc if you're looking at the tippy top of the market 15% may not be all that much so who knows?

It's a lead pipe cinch that some day the worm will turn. The question is how much further up will it go before that happens?
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  #1034  
Old Posted Aug 11, 2017, 2:24 PM
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Wait... unless you're doing a 15 year amortization... I assume you're familiar with the amortization schedule for a 30 year loan.



Interesting thoughts. For now it would take at least a gray swan to cause much damage. Fair to say though that they don't ring a bell when that's about to happen.

The RE in AZ, NV and FL were yugely overbuilt including large tracts of starter homes. Nothing even close to that today.

Don't care for Chicago. The state is one downgrade away from junk bond status. Chicago doubled their property taxes which solved a part of their financial problems. Cranes aplenty with nice tall boys being built downtown so Rahm has done a nice job of securing the status of the core city.

I could like the risk in K.C. though. The upside isn't as assured but that's why it may be a good buy. Buy low and sell high is never a bad strategy.

It will take a fairly nasty recession to drop prices in Denver by 20% I'd think; 10% sounds more realistic. Ofc if you're looking at the tippy top of the market 15% may not be all that much so who knows?

It's a lead pipe cinch that some day the worm will turn. The question is how much further up will it go before that happens?
I grew up in KC and on the positive side, the real estate market there is very stable. Very slow growth, but unlikely that you'll lose money either. Houses are cheap, but you couldn't pay me to move back there.
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  #1035  
Old Posted Aug 11, 2017, 3:03 PM
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Originally Posted by CherryCreek View Post
I suppose we each have to decide "what we can afford." But at least one website I found suggests that the lender rule of thumb is that housing shouldn't be more than 28% of monthly income before taxes. Annual income of $150,000 equals $12,500 per month and 28 percent of that is $3,500. A 30 year mortgage for 500k at 3.5% is $2,200 per month. Thus, at least applying the 28% rule (and considering you have almost no other debt), it would seem you could indeed "afford" a $500K home under this standard. (I get it that, your idea of what you can afford might not align with a lender is willing to lend you).
We're roughly in the same financial bracket (~$150k/no student loans/CC debt)...We're about to buy a $600k house, but let's be clear, this isn't our first home. We have equity left over, so really it's about a $400k loan, which is within range but a little on the high end.

The first one is always the toughest pill to swallow. Once you get a few years in your first home and some equity to go with it, you can buy nicer houses without your loan amount going up much higher (bought current house for 425, going sell for about 550, add in another 50 cash, and really we're close to where we started).
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  #1036  
Old Posted Aug 11, 2017, 6:29 PM
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It will take a fairly nasty recession to drop prices in Denver by 20% I'd think; 10% sounds more realistic. Ofc if you're looking at the tippy top of the market 15% may not be all that much so who knows?
I know about five people with reasonably well paying engineering jobs between the age of 26-32 who want to buy something in central Denver in the next couple years but can't afford it at current prices. Unless these jobs evaporate in a downturn, I can't see a 20% drop with this many people in the city primed to buy. At least in my anecdotal experience, if prices drop there would be a whole tier of people who can't quite get in currently but would start looking if they could.

This might change if the condo supply increases and there are reasonable options in the central city in the $300k range.
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  #1037  
Old Posted Aug 11, 2017, 6:39 PM
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I know about five people with reasonably well paying engineering jobs between the age of 26-32 who want to buy something in central Denver in the next couple years but can't afford it at current prices. Unless these jobs evaporate in a downturn, I can't see a 20% drop with this many people in the city primed to buy. At least in my anecdotal experience, if prices drop there would be a whole tier of people who can't quite get in currently but would start looking if they could.

This might change if the condo supply increases and there are reasonable options in the central city in the $300k range.
This. Currently trying to save up a down payment in hopes there is a downturn, or an oboarding of condos over the next couple of years. Otherwise, it's extremely difficult for me to get in right now, even with no debt.
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  #1038  
Old Posted Aug 11, 2017, 10:42 PM
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We're roughly in the same financial bracket (~$150k/no student loans/CC debt)...We're about to buy a $600k house, but let's be clear, this isn't our first home. We have equity left over, so really it's about a $400k loan, which is within range but a little on the high end.

The first one is always the toughest pill to swallow. Once you get a few years in your first home and some equity to go with it, you can buy nicer houses without your loan amount going up much higher (bought current house for 425, going sell for about 550, add in another 50 cash, and really we're close to where we started).
This makes perfect sense. We bought for $330, and we borrowed the down payment so we're still very much paying that back (family thing, 0% interest, we didn't want to wipe out our savings). I mean, couple years down the line, I can absolutely see buying a $600k home. I wonder what that is going to be though, haha.
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  #1039  
Old Posted Aug 11, 2017, 11:20 PM
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Ken, I think in one of your Infill comments sections you mentioned that the Market Street Station project may have a groundbreaking this month. Any updates you can share?
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  #1040  
Old Posted Aug 12, 2017, 4:03 AM
DenBronco8 DenBronco8 is offline
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Not quite Denver related but any opinions on that 70 acre movie production studio in Parker that will get built? Well it is Denver related in a way. I think this is great for Colorado and film aspect. Would be nice to see Denver make it into a bigger budget movie.
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