Corporate Housing Solutions | Nov. 15, 2018
There are always challenges that surface in cities that are experiencing tremendous growth. As the population explodes, the housing and rental market prices explode as well. This means cost-of-living goes up exponentially as a result.
Just recently an industry report calculated that the average salary needed to afford an average sized home in Denver is upwards to $90k a year. This amount is well outside the range of the average Colorado household and demonstrates that indeed the economy is not keeping up with the population and housing demands. The Denver Post reporting on this disturbing trend states,
“Keith Gumbinger, HSH.com’s vice president, calculates a metro Denver buyer in the third quarter needed to earn $91,276.61 to afford a loan on the median-priced home, which the National Association of Realtors lists at $450,100.
That ranks as the ninth highest salary requirement among the 50 large metros included in the survey.
The calculation assumes buyers put 20 percent down. If they only put 10 percent down, then the salary requirement increases to $105,319.45 in metro Denver. The estimate also used a 4.69-percent interest rate on a 30-year mortgage.” (Denver Post)
The problem is, rarely does the economy explode at the same rate the population rises, making it harder for people to make ends meet without the salary increases needed to support themselves month-to-month. This is why the housing crunch has become such a huge issue for the City of Denver over the last couple of years. They have to get a handle on this gap in order to prevent a mass exodus of workers from leaving the area due to the ever-increasing cost of living, mainly due to the rising housing costs.
One of the ways people are navigating this issue is through the use of short-term rentals. With in a few years the housing issue in Denver will be solved. By renting now and waiting for the housing prices to fall you set yourself up to save money now and buy at a time that is better suited to the average budget in the Denver area.