In accordance with one evaluation, Denver house possession is “completely inaccessible” for low-income earners.
The average closing price for homes in this city was $ 545,000 last month, according to the Denver Metro Association of Realtors. All kinds of workers likely couldn’t afford at least half of the homes and condos sold in June. (A quick math refresher, “median” means there have been an equal number of sales below and above $ 545,000.)
Carrie Makarewicz, assistant professor of urban and regional planning at CU Denver, told us that people’s annual income must generally be at least one-third the price of a home they want to buy. The Colorado Department of Labor produces income estimates for 495 jobs in Denver County. We looked at salaries in the 90th percentile in each category, the highest income level in CDL estimates, and found that workers in 441 of those industries make less than $ 181,666, a third of the June median price.
In other words, even the people who earn the most in these industries fail to buy this imaginary middle house on their own.
These include elementary school teachers (whose 90th percentile workers can bring in $ 80,473 per year), soil scientists ($ 88,507), epidemiologists ($ 82,435), web developers ($ 123,029), mechanical engineers ($ 135,133 ), Interior Designers ($ 87,131), Photographers ($ 88,339). ), Police Patrol Officer ($ 108,214), and Loan Officer ($ 123,655). The full list of professions that fell short in June can be found here.
All of this assumes that a single, childless person wants to buy a house or condominium in one of these areas. Obviously, if that person is married to someone who works, they would be closer to affording lots of houses in the market. If they had children, these expenses would take them a little further away.
Charlie Brennan, assistant director of research for the Colorado Center on Law and Policy, said rising prices have widened the gap between those who can buy a home and those who are stuck with renting.
“One thing that it does is that it is pushing home ownership further and further out of reach for low-income households,” he said. “The majority of low-income Colorado and Denver residents are actually renters.”
Makarewicz had a more blunt assessment.
“I would say it’s totally out of reach,” she told us. “You may never get there.”
What makes tenants more difficult is the fact that high valuations are fertile ground for evictions. People who rent houses in places like Elyria Swansea, where prices are among the lowest in town, are regularly approached with cash offers by investors. Some owners can’t resist selling while the market is hot. If they do, there is no guarantee that their tenants will be able to stay.
“When the price goes up quickly, there are many single-family homeowners who rent them out, tempted to sell them and pay them off and not have to deal with being landlords,” Makarewicz said. “People are being displaced because they can no longer find affordable rent.”
Denver has already gone in that direction, but the pandemic has made things considerably more difficult.
Brennan said there were some fundamental supply and demand issues that have been brewing for years.
“In-house production has not kept pace with demand,” he said. But it’s not just about numbers, it’s also about which places we build: “We have so many houses that are single-family homes. From the point of view of land use, this is not efficient use. “
He hopes officials will find new ways to achieve greater density in the city.
Makarewicz said, however, that the “madness of the pandemic” has also made living more expensive as working families struggle with finances. Some teleworkers could afford to jump into Denver’s Market and flee New York and California during the lockdowns that affected supply. The recession made it harder for Denverites with remote jobs to pay the bills, which took them further from home ownership. Meanwhile, supply chain disruptions have driven up building materials costs.
“It all contributes,” Makarewicz told us. “The result is that right now it doesn’t seem like a lot of people will be able to afford a purchase unless we see a sharp drop in home prices.”
She also warned that the middle price numbers don’t quite give the full picture. She is more interested in the cheapest sales in a given month, which is more of an indication of how accessible the market actually is.
According to the city’s latest data, the cheapest property to change hands in June was a condo in Goldsmith for $ 147,900. 53 jobs offered salaries in the 90th percentile that would be too low to be affordable.
The cheapest single-family home sold in June was a home in Montbello for $ 320,000. That would not be possible for top earners in 318 professions.