11/11/2023 0 Comments Denver housing bubble 2021And as many as 13.3 percent of Coloradans are extremely cost-burdened, putting half of their monthly income into housing. Of the half of Colorado renters who are cost-burdened (spending more than 30 percent of their monthly income on housing), they are more often women, over 40, single parents, and/or without a postsecondary education. More importantly than the rental rate in itself are the proportion of Coloradans who cannot afford the price levels they’re currently paying. On the other side, the lowest rental rates in the state are found in Elbert (10 percent), Custer (12.8 percent), and Mineral (13.4 percent). The spread is wide with the counties of Denver (50.1 percent), Alamosa (42.2 percent), and Bent (40.4) leading the way as renter-heavy counties. Today the state average is 34.8 percent, an increase that covers great variation across the state. Keeping would-be first-time buyers in the rental markets quells wealth accumulation as homeowners’ incomes are on average 82 percent higher than renters’.Ĭonversely, rental rates in Colorado have risen slightly since the global financial crisis low of 30.9 percent. This trend seen nationally can keep prospective home buyers in the rental market, placing even greater pressure on rental prices. Over the last 12 months, only 28 percent of home sales went to first-time buyers - a six-year low. is 13.4 percent or three times less.ĭespite the high demand for housing, this supply deficit pushes first-time buyers out of the market. Their primary holdings are 40.2 percent Black majority whereas the Black population in the U.S. Additionally, according to national data the five largest companies purchasing single-family homes more often purchase homes in Black majority neighborhoods. Recent studies demonstrate that single-family homes purchased by institutional investors face higher rent and fee increases - as much as 37 percent higher than the single-family average - as well as the diminishing quality of housing over time. In Larimer County, 14 percent of loans served these purposes compared to 11 percent for the state overall. Rural mountain counties lead the way, such as Routt County where 47 percent of loans were for second homes or investment properties in 2019. The share of loans for second homes or investment properties remains dramatically high across all metro areas as well as the state overall. These homeownership rates are slightly distorting as more and more of the housing market has been bought up by large investment and real estate companies. In the heat map above, the counties with the highest rate of home ownership are Elbert (90 percent), Custer (87.2 percent), and Mineral (86.6 percent), whereas, the lowest rates are in Denver (49.9 percent), Alamosa (57.8 percent), and Bent (59.6 percent). Like the housing supply, home ownership rates have remained lower since the crash, however, the pre-crash rates should be considered unusually high. The average in Colorado is slightly higher at 65.8 percent, down from a dramatic 2003 high of 71.3 percent. Simply put, there aren’t enough homes in Colorado today and we need a massive amount of new housing–across all income levels–tomorrow.Īcross the country, home ownership rates have been in decline since their 2004 peak of 69.1 percent today they sit at 65.4 percent, which is above the 50-year rolling average. Construction costs were already high, having consistently increased since the 2007 financial crisis. Home builders have been unable to fill open positions or recover to pre-pandemic levels, while the cost of copper wire was up 156 percent (y/y) in October 2021 and lumber 129 percent (y/y). Īdding to the housing supply deficit since the housing market crash in 2007, labor and supply chain shortages will add to the slowdown into 2022. When adjusting for seasonal vacancies (based on five-year estimates), the ratio of housing units to households falls to a 2016 low of 1.05 that carried into 2019. Adding insult to injury, estimates contend half of the state’s vacant homes are for occasional, recreational, or seasonal use. Meanwhile, the ratio of housing units to households fell from a high of 1.15 in 2006 to 1.09 in 2016 as of the latest available data in 2019, the ratio was only 1.11. Between 20, the state added 249,032 housing units while it gained 273,395 households. With population growth alone, the state cannot keep up with housing.
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