DENVER | Main Development Thread #6

[EngiNerd]

The lack of for purchase housing/condo/townhome supply is a very real threat to affordability in the metro area. It is going to set a bad precedent for housing prices that will be nearly impossible to undo in the future barring another market crash.

[DownhomeDenver]

Originally Posted by PLANSIT

It's beyond terrifying. Nearly every house/condo in our price range is put on the market and sold within a week. Cash rules. Realtors/Sellers are now setting deadlines for offer submittal (usually 2-5 days after listing). Highest/Best offer wins (usually much higher than asking price).

My house in Park Hill was listed and under contract in an hour. And I had three backup offers all over listing price within 48 hours.

The market is insane.

[wong21fr]

Originally Posted by seventwenty

A further segueway into the 'burbs with Punch Bowl Suburbs.

Damn, my future 'hood is now officially cool. Suck it Highlands!

[EngiNerd]

Soon to be back building on the metropolitan fringes



http://www.denverpost.com/news/ci_27668845/new-wave-development-poised-roll-across-denvers-suburban

[DenverInfill]

That graphic points out an interesting difference between single-family subdivisions and multi-family apartments: the "lots available" can take years to consume--several real estate cycles even--while in a multi-family housing project, it either gets built and all of the units are available immediately upon completion, or it doesn't get built. Green Valley Ranch is going on 30 years since the first homes were built, and Reunion is going on 15 years. Same for some of those others. Just an observation...

[seventwenty]

Originally Posted by EngiNerd

Soon to be back building on the metropolitan fringes

With a DRCOG projection of 4.3 million people in the metro area by 2040 — there are 3.1 million now — housing experts suspect that the nearly 1,000 square miles the city and its suburbs occupy today is primed to expand.

And much of it will need to be absorbed by the millennial generation — the 75 million-strong cohort born largely in the 1980s and 1990s.

Despite millennials' urban-hipster reputation, Joel Kotkin, a fellow in urban studies at Chapman University in California, said they are not much different from previous generations.

"Millennials are getting into their 30s and want to settle down — and places close in are very expensive, and the schools may not be so good," Kotkin said. "They are going to move out for the same reasons people always have."

A National Association of Homebuilders survey released this year found that 66 percent of millennials want to live in the suburbs, 24 percent seek a rural home and 10 percent are sold on the city center. The main reason cited by those favoring the suburbs in the survey is the desire for more space.

That's what prompted Mark Kluth, a 29-year-old expectant father, and his wife to ditch their 900-square-foot home near Olde Town Arvada last year for a much larger and newer house in the Buffalo Mesa neighborhood in Commerce City.

To add some anecdata, the majority of my 20-30 something homebuying friends, family, and acquaintances in Denver either bought a house out in the 'burbs or plan to soon. A large chunk of their reasoning came down to how much house you can buy, and you can buy a lot more house for $250,000 out in Reunion compared to Wash Park.

[BG918]

Originally Posted by EngiNerd

The lack of for purchase housing/condo/townhome supply is a very real threat to affordability in the metro area. It is going to set a bad precedent for housing prices that will be nearly impossible to undo in the future barring another market crash.

I agree, though there are a lot of townhomes currently under construction in neighborhoods like Five Points, Highlands, Jefferson Park, University, etc. East of Sloan's Lake is an entirely new neighborhood of townhomes.

[EngiNerd]

Originally Posted by seventwenty

To add some anecdata, the majority of my 20-30 something homebuying friends, family, and acquaintances in Denver either bought a house out in the 'burbs or plan to soon. A large chunk of their reasoning came down to how much house you can buy, and you can buy a lot more house for $250,000 out in Reunion compared to Wash Park.

I don't know when you last looked, but 250k won't even buy you the 6000sf piece of land, let alone an actual house, in Wash Park anymore...there's no way those could really be compared. It's not even a question of buying a lot more house in the burbs anymore, its being able to afford a house of any size these days, period. Affordability is a real problem.

People that are already in the housing market can ride the rising wave and the affordability will affect them less...its the ones trying to break into the housing market, "the Millennials", which will bear the biggest brunt of the rising market because there is no way their incomes are keeping pace with the recent housing (or apartment for that matter) price inflation.

I mean, how can this not be a concern to the overall economy of our great state?

The average price of a home in metro Denver increased to $390,067 in February, up from $326,958 in February 2014.

The increase of 19 percent year-over-year includes both single-family houses and condominiums, according to the latest data from the Denver Metro Association of Realtors.
....
Median home prices also increased, to $329,000 from $280,000, a 17 percent jump.

http://www.bizjournals.com/denver/blog/r...home-price-in-metrodenver-tops-390k.html

[bunt_q]

Originally Posted by BG918

I agree, though there are a lot of townhomes currently under construction in neighborhoods like Five Points, Highlands, Jefferson Park, University, etc. East of Sloan's Lake is an entirely new neighborhood of townhomes.

"A lot" is relative. When we're talking about townhome projects, the numbers just aren't there to keep up. In a city that's adding 15,000 people per year, we're building ~400 townhomes per year in those neighborhoods. It's a drop in the bucket, compared to ~4,000 rental apartments. The only way to keep up with for-sale affordability in Denver now in condos, and lots of them; we're just too built-out to depend on a rowhouse project here and there.

I mean, if only 1/5 of the Denver-proper multifamily construction was for-sale - leaving 80% rentals - you'd still be absorbing two sizable new buildings per year.

Originally Posted by EngiNerd

It's not even a question of buying a lot more house in the burbs anymore, its being able to afford a house of any size these days, period.

Yup.

[seventwenty]

Originally Posted by EngiNerd

I don't know when you last looked, but 250k won't even buy you the 6000sf piece of land, let alone an actual house, in Wash Park anymore.

That's kinda my point. At least for my anecdata, price matters. If you're priced out of one area, and you want to buy a home, you have to look elsewhere. Even then, the people in my anecdata set are wanting to buy as much house as they can. $300k for a house near South Downing? Great, but that house is only 1,100 sq ft. You can get a 2,200 sq ft house elsewhere if you're willing to have a longer commute downtown.

Of course my anecdata pool is a very biased sampling of about 30 or so people I can recall off the top of my head. It's not anywhere close to scientific, hence why I'm combing the words anecdote and data. I'm just merely stating I buy into the notion that we millennials might move back to the 'burbs.

[bunt_q]

Originally Posted by seventwenty

I'm just merely stating I buy into the notion that we millennials might move back to the 'burbs.

I think we millenials are content with smaller, but it's reached the point now where even that's not even an option. Even our generation has its limit, and 400 square feet in a place that is still not Manhattan just isn't worth it. It's not that far to cheaper burbs surrounding Denver - you can get there in 20 minutes still. Also, millenials value work-life balance. Which is a little hard to get when you need to make $150k to pay your mortgage. Englewood ain't that bad.

[wong21fr]

Originally Posted by seventwenty

Of course my anecdata pool is a very biased sampling of about 30 or so people I can recall off the top of my head. It's not anywhere close to scientific, hence why I'm combing the words anecdote and data. I'm just merely stating I buy into the notion that we millennials might move back to the 'burbs.

Original portmanteau's are not allowed, no matter how creative.

[seventwenty]

Originally Posted by bunt_q

I think we millenials are content with smaller, but it's reached the point now where even that's not even an option. Even our generation has its limit, and 400 square feet in a place that is still not Manhattan just isn't worth it. It's not that far to cheaper burbs surrounding Denver - you can get there in 20 minutes still. Also, millenials value work-life balance. Which is a little hard to get when you need to make $150k to pay your mortgage. Englewood ain't that bad.

I dunno about all of that. While I agree that housing is getting stupid expensive and that we want something nice to live in, I'm still not sure if we as a generation have fully shaken the bigger = better equation. From your data and the DP's data, we're selling (and poised to sell) relatively larger houses by the 470 (broken) beltway. Bigger houses further out for the same mortgage payments as you would get in Englewood. (Started Englewood listings on page 2 b/c pages 1 & 2 were full of storage units). Of course there are more factors to evaluate than just price. I agree that we slackers want a good work life balance, so maybe more of the Reunion people are working in Thornton, at the airport, UNC, etc. While the people in Englewood are working downtown, the DTC, Federal Center, etc.

Originally Posted by wong21fr

Original portmanteau's are not allowed, no matter how creative.

I'm not even the first one to use that portmanteau! I call shenanigans and request trial by drunken drone combat.

[RyanD]

Originally Posted by seventwenty

I call shenanigans and request trial by drunken drone combat.

I'm game for this. But, you might have to find and combat me in another city where the 'bang for your buck' is going to be more worth it, especially at New Denver prices...

[Denver Dweller]

http://www.bizjournals.com/denver/news/2...bqOBYu5F%2FO7W7Amf&t=1425943003&page=all

[seventwenty]

Originally Posted by RyanD

I'm game for this. But, you might have to find and combat me in another city where the 'bang for your buck' is going to be more worth it, especially at New Denver prices...

Oh we're just gonna steal your drone.

[Scottk]

Originally Posted by DownhomeDenver

i honestly can give two shits less about Phoenix,Scottsdale, Tempe, comparisons to Denver and all this constant drivel about it.

Hugs. I love everyone!

For what it is worth I actually enjoy Takefive's conparisons between Denver and Arizona. It provides good perspective on Denver's success relative to other cities.

And... It's not like you have to read his posts

With that said, your comment made me laugh out loud for some reason

[Scottk]

Originally Posted by EngiNerd

Soon to be back building on the metropolitan fringes



http://www.denverpost.com/news/ci_27668845/new-wave-development-poised-roll-across-denvers-suburban

That Candelas development cracks me up. Who would want to live a block away from the rocky flats nuclear disaster?

[DenverPoke]

Originally Posted by EngiNerd

Soon to be back building on the metropolitan fringes



http://www.denverpost.com/news/ci_27668845/new-wave-development-poised-roll-across-denvers-suburban

Anthology?? South of Parker. Jesus, just shoot me.

[Stonemans_rowJ]

Originally Posted by DenverPoke

Anthology?? South of Parker. Jesus, just shoot me.

Guys, remember that it only takes 20 minutes to get anywhere around Denver, so you can live down there and still have your work/life balance, a fantastic quality of life, and a great "return on your investment" when you go to sell.