In March, the average closing price for a home in the Denver metro area was $660,000. That’s a jump of $25,000 from February and up $100,000 from a year ago.
DENVER — The demand for homes in Denver is there, but more and more homebuyers are finding that owning a single-family home isn’t possible without shared walls.
According to the latest Market Trends report from the Denver Metro Association of Realtors (DMAR), the average closing price for a single-family home in the Denver area is $660,000.
“Some of them spend more than $100,000 and the average person who makes $20, $25 an hour can’t afford that. They don’t have the reserves,” DMAR Chairman Milford Adams said.
Adams said something had to change because, for so many, the American Dream is just that – a dream.
“We have to figure out how to bring those prices down because wages don’t match prices,” he said.
Although DMAR’s report shows inventory increased by an additional 995 entries from February to March, Adams said the area would need to build 100,000 more homes to even out the market.
His customers end up looking at condos or “buying less.”
“This is a good example: A client of mine bought a two-bedroom house when they needed a three-bedroom house, but the basement wasn’t ready,” Adams said. “But it was in the price range that they can qualify for it.”
To make matters even more difficult, first-time homebuyers are competing with Wall Street investment firms that buy homes unseen to rent.
“And that’s the challenge, because they’re taking inventory, so someone who wants to buy this house, lives in the neighborhood, doesn’t even have the opportunity because they’re paying cash, they’re closing in two weeks,” Adams said. “A lot of them don’t do valuations. ‘We just take the property.'”
With that added competition and rising prices, Adams said, the racial wealth gap is also widening.
“The wealth gap, we’re at 35% of home ownership here in Colorado, and that number is going down,” he said. “Now we’re at the lowest since 1968, when the Fair Housing Act came into force, at 40%.”
There is no shortage of construction in Denver, but most of it is single-family housing. Adams said the city needs to incentivize this.
“You do the math, it doesn’t work,” he said. “We are in a crisis and we have to take responsibility. From our associations, to our leadership, to our city officials, to our legislature — these are all our problems.”
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