Author: Walter Huff
Recently, Colorado seems to be the place for everyone! And it makes a lot of sense. The weather here is perfect for almost every outdoor activity, the mountains, the culture…. What’s there not to love about Colorado?
Between 2010 and 2020, the state’s population has grown tremendously from 14.8% to 5.8 million residents. This makes Colorado one of the fastest-growing states in the country. However, one of the questions I keep getting is whether it’s expensive to live in Colorado. As more people come into the state, the cost of living is bound to go up.
But let’s break this down
Housing in colorado is the biggest and main factor in why the cost of living in the state is so high. According to estimates by Zillow, the median price for a home in Colorado at the beginning of the year was $528,211 as at the time of writing this article, the price had risen to $558,210. This figure is expected to continue rising in the next few years.
If we break the housing costs further to focus on the three most popular cities in the state, the situation gets worse!
Take Denver for example, one article by The Denver Post claimed that the home prices in Denver’s metro area were as high as 5 times the median household income! In simple terms, take your monthly income and divide it by 2.5! That’s how much you can afford in Denver. More worrying is the fact that housing prices in Denver will continue to rise as months go by.
The average cost of a home in Denver is $580,678 an excess of $22,468 over the state’s average. The good news is that the city’s real estate prices are cooling off mainly because prices have become so unbearable. If you find a unit you can afford right now, I wouldn’t suggest waiting! Take the opportunity while it still lasts.
Colorado springs is another fastest growing city in the state. It is much more affordable compared to Denver as Zillow estimates that the average cost of homes in the city is $469,987. Unlike Denver, the real estate market in Colorado Springs is on the rise and red hot and it is likely that it will stay that way for a while.
Real estate prices have been on the rise since 2019. According to Zestimate, if you bought a home in Colorado Springs in 2018 valued at $272,000, today that home is worth more than $394,600 in just a span of three years!
Boulder is the last city we’ll look at. Overall, I feel Boulder is just a small town with inflated big city prices. By nature, Boulder is known as a college town, but it is home to many of Denver’s most successful residents. The housing prices in Boulder are out of control. You could end up paying upwards of $550+ per square foot!
In addition, the Zillow home value index places the average cost of homes in Boulder at $1,027,432. That’s extreme and thankfully, Boulder’s housing market is cooling off and housing prices are expected to steady in the coming months.
Renting Vs. Buying
Renting in Colorado is more expensive than buying. However, a 2020 report suggests that renting a home is better than buying in colorado. The report suggests that renting is a cheaper option in more than 53% of Colorado counties.
But, let’s break it down further
The average cost of buying a home in Colorado is $558,210 or at least $3,500 per month.
On the other hand, the average cost of renting an apartment is $1,494 per month.
Renting in the short term is cheaper but when you consider the benefits of home ownership, it would make sense to buy a home.
One caveat of renting in Colorado is that renters are on their own as there is no visible renter representation from the agents of association whatsoever. Colorado renters have to find a good deal and negotiate for themselves.
So how much do you need to earn to afford a decent living in Colorado?
Well, according to a website; HowMuch.net, to live a comfortable life in Colorado, you need to earn over $100,200 annually that’s about $8,350 per month. But you need to account the inflation as well as so many other factors. This is just an estimate.
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