Vail Daily column: Home ownership is within reach for many
We all realize it will take many years for government sponsored workforce housing projects to provide an adequate number of home ownership opportunities for individuals, couples and families in Eagle County who are anxious to move on from being chronic renters. For that reason, I constantly monitor the availability of the local Multiple Listing Service listings at the lower end of the county’s real estate price range on behalf of first time homebuyers.
Let’s define “starter home” as having these characteristics: the residence offers at least two bedrooms and 800 square feet of living space; it is priced between $275,000 and $425,000; and monthly homeowner association fees are $350 or less.
During the last 12 months, 264 properties meeting those first two criteria were purchased county wide and that includes a few new construction duplex homes and town homes. That’s 22 transactions per month. An additional 50 transactions are now in escrow and 45 are available as active listings. Geographically, Gypsum leads the way followed by Avon, Eagle, Edwards and Vail.
However, if you cull out properties which have monthly association fees greater than $350, then the size of the starter home market shrinks by 25 to 30 percent, to about 16 transactions per month. And the geographic ranking shifts as you would expect — Gypsum leads the way followed by Eagle, Edwards, Avon and Vail.
Note: Since association fees are counted when lenders calculate allowable debt to income ratios, fees greater than $350 per month push those properties away from being viable for the majority of starter home purchasers. Examples include the popular Avon Lake Villas at just under $500 per month and The River Pines Condos east of Riverwalk to a lesser degree.
For perspective on these statistics, between 550 and 600 affordable starter homes will flow onto our resale market over the next 36 months. That’s a lot more than people realize.
Let me offer a little coaching for our young professionals who have steady incomes, good credit scores and low non-housing debt: If you have not yet saved enough for a down payment, then consider asking your parents to provide the down payment in the form of a gift. They understand the difficulty you face in making the transition from renting to home ownership to stay in the valley long term. Many will agree to invest in you so that you can invest in the valley.
Finally, my definition of a viable starter home includes a second bedroom for two reasons. It provides room to grow and longevity before you’ll need a larger residence. In the short term, it may be even more important because of its high rent potential — accommodate one of your best friends in that second bedroom at, say, $750 per month; subsidize your housing budget as the property owner to the tune of $9,000 per year. Wow!
Kent Petersmeyer works with buyers and sellers day-to-day as Managing Broker for The Cascade Team Colorado based in Edwards. He can be reached at either email@example.com or 970-456-8203.
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