New apartment buildings line a street in trendy downtown Denver. (AP Photo, File)
GREELEY — Home affordability in Weld County and the Greeley area is not what it once was, and that’s because wages aren’t keeping up with the cost of Denver and the rest of Northern Colorado’s home prices, according to a housing report released last week.
Weld County is among nine counties in Colorado ranked among the least affordable for home purchases in the U.S., according to Attom Data Solutions. The company assembles an affordability index every quarter, which measures a county’s home affordability based on the share of income needed to buy a median price home in the county.
The counties cover the Denver, Boulder, Fort Collins and Greeley metro areas and El Paso County.
The only Colorado metro areas not on the list are Pueblo and Mesa counties.
Adams County in suburban Denver fared worst among Colorado counties followed by Arapahoe, the city and county of Denver and Weld.
Denver’s median sale price for a single-family home hit a record $400,000 in March, industry groups say.
In Weld, the median sales price of a home was $280,000 in the first quarter of 2017, an increase of 12 percent from last year. The average wage growth over that time was 6 percent, meaning home prices increased twice as fast as wages did in the last year, said Daren Blomquist, senior vice president at Attom Data Solutions.
It’s been the trend for several years now, Blomquist said.
“The Denver area has become a place where the West Coast refugees are going to,” he said. “The paradigm is shifting whereas a market like Weld was once seen as an affordable, kind of middle-America market, and it’s now attracting this outside attention from folks who are used to spending a lot more of their paycheck on housing. That’s shifting the affordability equation.”
In Weld, the share of average annual wages that must be spent for a median-price home has risen to 48.3 percent from a once-historic high of 39.6 percent.
“Basically, if you’re buying a median price home (in Weld) and you make an average income, you need to spend 48 percent of your income on buying a home,” Blomquist said.
The national average for the first quarter was 37 percent, according to Blomquist, and historically it has been normal for buyers to spend about a third (33 percent) of their income on buying a home, he said. Weld has folks spending almost half of their income on buying a home.
“It really limits who can buy a home in that market,” he said.
Brian Lewandowski, associate director of the Business Research division of the University of Colorado’s Leeds School of Business, said home affordability is an issue nationally with home prices broadly outpacing wage growth in many areas of the country.
“Locally, economic growth has played a large part in this with strong population growth and lagging home construction resulting in too many people chasing too few homes,” he said in an email.
Colorado’s population growth and a lack of single-family home inventory are factors in what jacks up those home prices, according to Chalice Springfield, CEO for Sears Real Estate in Greeley.
The median sales price for homes in the Greeley area is $264,000, up 12.3 percent from last year, Springfield said. The median prices for homes in Fort Collins and the Loveland/Berthoud area are $369,750 and $372,750, respectively, she said.
“This has been a wageless recovery in terms of not seeing a lot of wage growth even as we’re seeing home prices on a tear,” Blomquist said.
colorado springs feels crunch
Colorado Springs home prices are climbing into record territory.
The median price — or mid-point — for homes sold in March was $268,000, beating the previous record of $265,000 set in January and August 2016, according to the Pikes Peak Association of Realtors. March’s median price was up almost 12 percent from the same month last year. Median prices now have risen for 28 straight months on a year-over-year basis.
The average sales price in March was $295,828, a 10.4 percent increase over last year, although short of February’s record of $301,385.
The supply of homes remained very tight. There were 1,454 homes listed for sale in March, down 25 percent from the same month last year, the industry group said.