CREJ

2 / 40

Page 2 — Multifamily Properties Quarterly — August 2017
Letter from the Editor
I t’s hard to discuss the Denver
housing market and not end
up on the topic of affordability,
which quickly devolves into gen-
eralities as each person shares
his thoughts on “affordability.” Howev-
er, in this issue, the topic is examined
through multiple lenses and offers
readers perspectives that are rooted
in math and based around current
statistics.
The first set of statistics that may
come in handy next time you find
yourself in this
inevitable con-
versation is Craig
Stack’s article on
Page 12. In it, he
looks at average
Denver wages
and compares
them to average
Denver apart-
ment rents. Based
on the industry-accepted baseline
of spending no more than a third
of your income on housing, Stack
uncovers that the Denver apart-
ment market looks pretty fair.
The accompanying graphic drives
home this point and compares our
income-to-rent ratio with other
thriving cities.
However, while rental rates seem
to be keeping pace with incomes,
the cover story makes an argument
that entry-level housing may be a
thing of the past. The author, Andy
Hellman, makes some compelling
points as he breaks down the costs
of buying and living in today’s typi-
cal condo. When the monthly costs
are considered – basing everything
on averages defined within the arti-
cle – the condo homeowner in the
example ends up spending about
$200 more a month than the aver-
age renter.
However, the larger frustration for
many in this demographic is the
down-payment cost that comes with
a purchase this large. For a $320,000
condo, with a 20 percent down pay-
ment, they’d be looking at paying
$64,000 up front. Saddled with student
loan debt and life expenses, squirrel-
ing away savings for this type of down
payment is challenging, to say the
least.
In fact, for millennials in Colorado,
many are looking at a 10- to 15-year
period of savings before they can
afford an average down payment,
based on income data from the U.S.
Census Bureau, according to a June
report fromAbobo Apartments.
Now some may point out that this
equation focuses on condos, and our
legislative environment has not been
friendly to condo development over
the past decade, making the supply
extremely limited and driving costs
up. However, as of late July, Denver’s
median home prices for one- and two-
bedroom houses were $260,000 and
$375,000, respectively, according to
Trulia.
The takeaway seems to be that Den-
ver still is affordable for many rent-
ers who want to live comfortably in
a vibrant community, but purchasing
homes will take time and successful
saving habits. All this bodes well for
the for-rent market.
Contents