The single-family, stand-alone home sold for $300,000 in Denver has joined woolly mammoths and Tasmanian tigers as extinct species.
For many people, this means that the traditional white picket fence dream is all but dead as well.
Craig Ferraro, an assistant professor in real estate at the University of Colorado, recently looked to Zillow, an online real estate marketplace, to search for listings at that coveted price. His conclusion: “Unless it’s part of an affordable housing program, nothing,” he said in a telephone interview. “Without subsidies from various groups, I’d say it’s extinct.”
Ferraro said buying a $300,000 detached home in Denver would require subsidizing either the physical home or the land itself.
Buyers looking to spend the same amount as their parents will be disappointed with today’s metro housing market. The Denver Metro Association of Realtors said the median closing price for a residential home in March was $602,750 — the highest number on record. There were only 495 active listings available that month, accounting for the lowest March on record.
According to that year’s DMAR update, the average cost of a single-family home fell into the range of about $300,000 in 2014.
Of the large U.S. metropolitan areas, the Denver area has the 10th highest home sales of more than $1 million, according to the Inspection Support Network. As per the details of the new report, sales of luxury homes accounted for around 5% of all home purchases in 2020.
On top of that, mortgage rates have now reached 5.3%, according to the Mortgage News Daily Rate Index.
“Now that we have interest rate hikes, I think it’s made it a whole new ballgame for first-time home buyers, making it very difficult for them,” Ferraro said. “It is not just the price of the house; It’s that monthly payment.”
However, he pointed to a silver lining: Compared to historical interest rates that began to rise in the 1970s to the late 1990s, current ones are “relatively low.”
Chelsea Stein, who has worked as a Denver-area Realtor for nearly five years, encourages first-time home buyers not to let these numbers scare you. When potential homeowners opt out of the process, the decision is “really really doing them long-term harm,” she said in a telephone interview.
Compared to renting, “ownership is the better financial decision, no matter how you spin it,” Stein said.
Still, she believes those looking for $300,000 single-family residences need to “in a reasonable way outside of Denver to get that kind of price point,” communities like Greeley, Wiggins, Deer Trail, and Pueblo. to uncover
It’s also not far behind the $400,000 home, which Stein describes as “extinct very quickly.” She predicts the cost could be wiped out as soon as next spring.
A standard lot in the Denver area costs anywhere from $250,000 to $500,000 for “just dirt,” Stein said.
Only three agent listings in Denver for single-family homes between $300,000 and $400,000 cropped up on Zillow on April 26. Located near West Alameda Avenue, a two-bedroom, one-bathroom house with 542 square feet of space is going for $320,000.
Another 771-square-foot, two-bed, one-bath home in the Elyria-Swansea neighborhood was put on the market for $389,500. The listing describes it as “a truly remarkable remodel with a designer touch,” highlighting a covered front porch and kitchen with quartz counters and custom tile backsplash.
Realtor John Roberts of Denver’s Banyan Real Estate faces the trials and tribulations of the hunt for a $300,000 detached, single-family home with his stepson, a recent University of Colorado graduate.
The pair didn’t find any proper contenders in Denver and even struggled to turn up sound options in the wider metropolitan area, including Commerce City and Westminster.
“It was all either a fixer-upper or really unsettling, to be honest,” he said in a telephone interview. After being searched his stepson agreed and returned to the rental market.
Roberts said home-buying candidates can still find condos and some townhomes in Denver for $300,000 and less. However, they have noticed that the city’s supply of single, single-family homes at that cost has dried up over the past five years.
As with most of Denver’s construction in the early 20th century, the common practice at the time was the construction of smaller houses over larger ones. Roberts told TODAY, “that’s what you’re seeing torn apart, and some entry-level home buyers just can’t get it for themselves.”
He described the current housing market as “undoubtedly” one that was different from his age. When Roberts graduated college, he bought a condo within six months. He started his real estate career in 2001, when the market average was around $235,000.
“I’m struggling to wrap my head around how cheap it is,” Roberts said. But, “I still regard Denver as a long-term market.”