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Denver's Rising Real Estate Prices are Hitting Locals Hard

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Everyone Wants to Be Here

Denver is undeniably a gorgeous city. It's always been a hotspot for tourism, but it seems that everyone is starting to realize that it's a great place to live, too. A dramatic skyline, easy access to world-class ski resorts and a booming new recreational marijuana industry are just a handful of the things drawing new people here in droves. What used to be a small city at the foot of the Rockies is quickly becoming a bustling metropolis (hyperbole, maybe, but it's all relative) and simply put, we are just not ready for the growth. Rapid population expansion has been a problem plaguing Denverites since the 1990s, but in 2012- the year recreational pot was legalized- that problem has been on the forefront of everyone's minds. Locals tend to blame non-native residents, dubbed "transplants", for a lot of their issues, chiefly the exponential growth in Denver inhabitants and the cost of living.

More People Means More Competition

Are transplants really to blame for the problem? Possibly. Since 2012, the state population is estimated to have grown by 366,000 people, with the capital city being the epicenter of this mass migration. With the massive population boom, the increase in demand for housing has grown dramatically, driving property values through the roof. Truly, Denver- and Colorado in general- is a seller's market; despite the extremely inflated cost of homes, however, consumers continue to shell out. Washington Park, one of the city's most desireable neighborhoods, has seen the average home value increase from $488,000 to $735,000 since January of 2012. So what does this mean for people who already live here?

The Real Cost of Property Value Increase

The increase in property value isn't always a great thing, even for homeowners. Financial institutions target current homeowners when advertising home equity lines of credit, tempting them to take out a second mortgage on their home to gain access to extra funds. Along with the increase in property values comes an increase in property taxes, too, and some simply can't afford it anymore. Escrow account shortages these days are common. People are moving out of homes they've lived in for years because it's just too darn expensive anymore. The townhome I grew up in in Golden, just fifteen minutes from Denver, cost my family $800 a month to rent, utilities included. That same property is for rent today, and the owners are asking $2900 a month sans utilities. Since moving out of that house six years ago, I don't know of a single person who has been able to afford to stay in the neighborhood.

The real tragedy is that locals are getting displaced to make way for the incoming transplants, many of them with a higher-than-average income and better access to housing. Condos and apartments are just not being built quickly enough to accommodate the high demand, and what apartments do exist aren't exactly affordable. The availability of low-income housing has all but dried up, with some apartment complexes taking would-be applicants and sticking them on wait lists that are years long. The fact that there are now more people in Denver than there are places to house them aside, the climbing property values are affecting many aspects of life beyond where we live. More than 50 percent of my budget is devoted to rent. I'm one of the lucky few among my friends who isn't splitting rent with three or four roommates. It's a great time to be a real estate agent and kind of a terrible time to be practically anybody else, honestly.

 

So What Do We Do?

At the end of the day, transplants aren't going anywhere. They're here to stay and they're going to continue moving here, regardless of how many "Transplants Go Home" signs people stick out on their front lawns. The best we can do is embrace them, welcome them with open arms and build the darn housing we so desperately need to accommodate everybody. What does under-building and under-engineering roads solve? Nothing. There's a great market for new apartment complexes and affordable condos here. I'm hopeful that things will get better. As a native Coloradoan, it's difficult to imagine leaving my home for somewhere else because it's too expensive to live here anymore. But I remain optimistic; population growth brings positive changes too, and maybe before long we'll start to see more affordable housing pop up to accommodate the rest of us.

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