The lack of affordable options for first-time or move-up buyers has been felt across the country, and Denver is no different. The average price right now for a detached single-family home is $532,000; the attached product is still $335,000, according to the Denver Metro Association of Realtors.
There’s not going to be any such thing as affordable housing in Denver or Denver County; it’s just not going to exist. That creates opportunities for remodelers, though, as more homeowners opt to renovate their current homes. And while affordable inventory may remain low, there are ways for lower income buyers to invest in home ownership.
The Denver metro area is enjoying an economic boom. We’ve got a low unemployment rate. We’re starting to see more and more homes come on the market, with active inventory up 18% year over year. Part of that is because interest rates are still staying low.
The other side of a boom time is that some people are just not able to afford to live in Denver. If they are, they’re likely opting for a condo, or a resale detached single-family home, where the price point is significantly lower than in new construction.
If a buyer is going to pay $40,000 for commissions on a new home, they could put that $40,000 into their home and stay where they’re at. The remodeler is positioned to compete against the residential real estate agent and the home builder.
There are affordable options in new construction, but they’re not going to be necessarily in Denver. For example, Oakwood Homes’ American Dream series features smaller homes on smaller lots in Green Valley Ranch.
Options for low-income buyers
There are some income-restricted properties within Denver County that are part of Denver’s affordable housing program. However, those come with restrictions when buyers sell the home. To keep the homes affordable, sale prices are capped, so a homeowner’s neighbor might sell for $400,000, while they can only sell for $300,000. They love it when they buy it, and they hate it when they sell it.
An organization a lot of people don’t know about is the Colorado Housing and Finance Authority. CHFA provides home buying and rental assistance throughout the state. The organization provided over 8,300 customers with home mortgage or refinance loans in 2018, and invested over $94.1 million in down payment assistance, according to its 2018 community report.
If buyers have the monthly cash flow and the credit, they just don’t have the down payment, CHFA is a great option to get them in a home.
Michael Beninati is managing partner and owner of Windermere Metro Denver Real Estate. Windermere’s Builder Solutions program provides professional marketing, sales and operational support to builders and developers through all stages of new home sales. He can be reached at [email protected].