Single-family, stand-alone houses in Denver selling for $300,000 have joined woolly mammoths and Tasmanian tigers as extinct species.
For many, that means the traditional white-picket fence dream is all but dead as well.
Craig Ferraro, adjunct professor in real estate at the University of Colorado, recently perused Zillow, an online real estate marketplace, to search for listings at that coveted price. His findings: “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.”
To purchase a $300,000 detached house in Denver, either the physical home or land itself would need to be subsidized, Ferraro said.
Buyers looking to spend the same amount as their parents did will be disappointed by today’s metro housing market. The median closing price for a residential home stood at $602,750 in March – the highest number on record, the Denver Metro Association of Realtors said. Only 495 active listings were available that month, accounting for the lowest March on record.
The median cost of a single-family house last fell around the $300,000 range in 2014, according to a DMAR update from that year.
Out of large U.S. metropolitan areas, the Denver area has the 10th most home sales exceeding $1 million, according to the Inspection Support Network. Luxury house sales accounted for almost 5% of all home purchases in 2020, the new report details.
On top of that, mortgage rates now reach as high as 5.3%, according to the Mortgage News Daily rate index.
“Now that we have interest rate increases happening, I think it’s just made it a whole new ballgame for first-time homebuyers, making it significantly more difficult for them,” Ferraro said. “It’s not just the home price; it’s that monthly payment.”
However, he pointed to one silver lining: Compared to historic interest rates that began soaring in the 1970s until the late 1990s, the current ones are “relatively low.”
Chelsea Steen, who’s worked as a Denver-area realtor for about five years, encourages first-time house buyers to not let these numbers scare them away. When potential homeowners opt out of the process, the decision is “actually really hurting them long term,” she said in a telephone interview.
Compared to renting, “owning is the better financial decision, no matter how you spin it,” Steen added.
Still, she concedes that those looking for a $300,000 single-family residence need “to get a fair ways outside of Denver to get that kind of a price point,” highlighting communities like Greeley, Wiggins, Deer Trail and Pueblo.
The $400,000 house isn’t far behind it either, which Steen described as “also going extinct pretty quickly.” She predicts that 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 the dirt,” Steen said.
Only three agent listings for single-family houses between $300,000 and $400,000 in Denver 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 house in the Elyria-Swansea neighborhood was put on the market for $389,500. The listing describes it as “truly a remarkable remodel with designer touches throughout,” highlighting a covered front porch and kitchen with quartz counters and custom tile backsplash.
Jon Roberts, realtor at Denver’s Banyan Real Estate, recently underwent the trials and tribulations of hunting for a $300,000 detached, single-family house with his stepson, a recent University of Colorado graduate.
The pair couldn’t find any contenders in Denver proper and even struggled to turn up sound options in the wider metropolitan area, including Commerce City and Westminster.
“It was all either fixer-upper or just really untenable, to be honest,” he said in a telephone interview. After searching, his stepson relented and returned to the rental market.
Roberts said that home-buying hopefuls can still find condos and some townhomes at the $300,000 mark and below in Denver. However, he’s noticed that the city’s supply of stand-alone, single-family houses at that price point dried up over the last five years.
With much of Denver built in the early 20th century, common practice at the time was the construction of small houses on large lots. Today, “that’s what you see being torn down, and some entry-level home buyer can’t get it for themselves,” Roberts said.
He described the current housing market as “unquestionably” different from the one he aged into. When Roberts graduated college, he bought a condo within six months. He kicked off his real estate career in 2001 when the market average sat around $235,000.
“I struggle getting my head wrapped around how unaffordable it is” now, Roberts said. But, “I still believe in Denver as a long-term market.”