affordable housing

Apache is functioning normally

Servicing, Jumbo, Appraisal, HELOC Products; CA ADU News; Why Extensions Cost Money; Recruiter Interview

<meta name="smartbanner:author" content="We now have a native iPhone
and Android app.
Download the NEW APP”>


This website requires Javascrip to run properly.

Servicing, Jumbo, Appraisal, HELOC Products; CA ADU News; Why Extensions Cost Money; Recruiter Interview

By:
Rob Chrisman

2 Hours, 29 Min ago

“I’m supposed to respect my elders, but now it’s getting harder and harder for me to find one.” Gradually it’s becoming harder and harder to find a bank that does loans outside of its footprint. Finding people in their late 30s or 40’s is not hard: The median age in the United States is 38. There are plenty of people in our industry in their 40s. You know, the 40s… when you’re like an iPhone 6: you don’t have all the features of the newer models but you’re dependable and affordable. While we’re on ages, yesterday a few folks pointed out that Happy Days first aired on ABC (remember network TV?) fifty years ago yesterday. (It went for 10 years until July 1984.) The show was “set” in Milwaukee but filmed in California which accounts for 20-25 percent of residential loan production and is in the news for its ADU policy. (More below.) Today’s podcast can be found here, and this week’s is brought to you by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products (nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics) unite the people, systems, and stages of the mortgage process. Today’s features an interview with recruiter Brianna King on how job candidates can separate themselves from their competition and common résumé faux pas.

Lender and Broker Services and Software

Spring EQ, ranked as the #1 non-bank and #6 overall home equity lender according to reported data from Bankrate (based on statistics from Inside Mortgage Finance,) knows money can be tight after the holidays. Now is the time to assist your borrowers in tackling their seasonal debt! Spring EQ’s fixed-rate home equity loans and adjustable-rate HELOCs (3yr & 10yr) can help your borrowers get the cash they need without refinancing a low first mortgage rate. Need pricing for a loan? Try Spring EQ’s quick Pricing Calculator and get multiple options in seconds! And with Spring EQ, you can earn up to 2.5 percent in broker compensation on HELOCs and HELOANs. Start 2024 off right and join today’s webinar, which will review the many reasons borrowers want to tap their home equity. Think of Spring EQ first for all your seconds. Become a partner now or contact your Account Executive today.

At this point, the phrase “appraisal modernization” is nothing new, but does it make sense? Are you lost in a jargon jungle, unsure what it means for you? This free webinar recording, “Decoding the Modern Appraisal,” clears the fog and equips you with the knowledge to navigate all things appraisal modernization. Consider it your modern appraisal masterclass, your go-to guide. Industry experts like Scot Rose from Class Valuation, Rachel Robinson from Rocket Mortgage, and Julie Giesbrecht from the FHFA answer your toughest questions like: How are lenders utilizing modern appraisal options? What are the real-world results and benefits of these efforts? How do modern appraisals combat bias? What does the property data collection process look like? And more! Get ahead, get informed, and unlock the secrets of appraisal modernization. Click here to watch and navigate this ever-evolving landscape with confidence!

“Discover your secret weapon in today’s mortgage market: the Lakeview Correspondent Team. In an era where reliable partners are vital, our Correspondent team stands out, providing solutions that enable mortgage lenders to not just compete, but thrive. With the Bayview Non-Agency Product Suite, including Bank Statement, DSCR, and Prime Jumbo ARM’s programs, among others; lenders are equipped with the innovative products necessary to pave a successful path into 2024 and beyond. Don’t be left behind: contact our Regional Business Development professionals today and set your team up for success.”

Servicing Assistance and Software

“Can digitization change the customer experience in 2024? Absolutely! Ask yourself if your potential and existing customers can access the information, decision-making, and results they need 24/7, real-time, and from any device? This is the expectation. Regretfully, many servicers have limited capabilities in this area, and past industry volatility may have impaired your organizational capacity to meet the needs of today’s customers. However, bridging the gap between current functionality and delivering a digital experience doesn’t have to be daunting. Our recent blog, “Break the Rules: Reimagine a Digital Customer Experience in 2024,” explores how digital capabilities can be readily incorporated into your existing processes, delivering innovation, self-serve access, dynamic results, operational efficiencies, cost savings, and more. Want to see how? Meet us in Orlando for MBA’s Servicing Solutions Conference & Expo. A reimagined digital customer experience starts with a better approach, better results, and better software. CLARIFIRE®, truly BRIGHTER AUTOMATION®.”

MBA’s Servicing Solutions Conference and Expo is around the corner, which means it’s almost time for Martini Hour. Servbank, the nation’s premier bank subservicer, and Auction.com are hosting a martini hour that promises to shine and be as lively as the city of Orlando. Indulge in martini flights and delicious food while enjoying the company of friends. The martinis begin flowing on Wednesday, February 21, between 5-9PM ET, at Blue Martini, 9101 International Dr #1182, Orlando, FL 32819. RSVP here. No time for martinis? Meet Servbank, the nation’s premier bank subservicer, at booth #601 or set up some time to connect by emailing us.

When your customers are hit by a natural disaster, they can find themselves face-to-face with financial challenges they never would have expected. And since experts predict the number and intensity of natural disasters will only increase, servicers need to rethink how they help homeowners, before the next crisis hits. After all, ICE data shows that most borrowers in forbearance after disaster events ultimately return to performing status. And what’s more, a multi-year analysis revealed that access to self-service technology may help more borrowers stay in their homes during periods of financial hardship. Read more in ICE’s complimentary case study, “Helping Homeowners in Times of Financial Hardship.”

ADUs: As California Goes, So Goes the Nation?

Are you ready to lend on them? AB-1033 gives California cities the option to allow homeowners to sell their ADUs separately from the main house. Accessory dwelling units, also referred to as ADUs and “granny flats,” have been available in California only as rentals. But the new law, Assembly Bill 1033, is giving Californians the opportunity to buy and sell them as condominiums.

California MBA CEO Susan Milazzo sent me a note yesterday. “The California MBA monitored AB 1033 throughout 2023 and worked to ensure certain amendments were taken to address mortgage industry concerns. Specifically of concern was whether the ADU sale would impact the mortgage note on the primary property. Eventually amendments were taken to include that the country recorder cannot record the separate ADU/condominium with the consent of all lien holders, which addressed our major concerns and allowed us to remove our opposition.”

Lenders and property owners across the nation that ADUs come in all shapes and sizes, like converted garages, a small structure in the backyard, or, as often seen in San Francisco, an unused portion of the main house.

Assemblyman Phil Ting (D-San Francisco) drafted the legislation where property owners in participating cities will be able to construct an ADU on their land and sell it separately, following the same rules that apply to condominiums. It gives homeowners more options for building on their property, and “the hope is, it would create more homeownership,” said Ting.

As with new condominiums, homeowners building ADUs must notify the local utilities, including water, sewer, gas and electric, of the creation and separate conveyance of the unit. The main residence and the ADU will have two different property taxes. Each property will also have to form a homeowner’s association to assess dues to cover the cost of caring for the property’s exterior and shared spaces, such as the driveway, a pool, or a common roof.

California, however, is not the first. Selling ADUs as condominiums is having success in places such as Oregon, Texas, and Seattle, primarily to friends or family members. When Seattle removed regulatory barriers that discouraged property owners from constructing ADUs in 2019, the city issued nearly 1,000 ADU permits, more than four times the number permitted in 2018. In 2022, the city permitted 437 attached ADUs and 551 detached ADUs, which it referred to as backyard cottages. Just under half were on sites with multiple ADUs and one-third were part of a development that included a new single-family residence and sold mostly between $500-800k.

The law, with the backing of the California MBA, removes a state prohibition on the conversion of accessory dwelling units (ADUs) to condominiums. It ties in nicely with the FHFA’s goal of increasing the supply of affordable housing. “FHFA asked the Enterprises to review AB 1033 in the form passed by the California Assembly on May 31, 2023. Specifically, the bill’s proposed language related to the separation of an ADU, and lienholder consent (Section 2) does not appear to conflict with the current Selling Guides of either Enterprise.”

A letter sent to the FHFA, which oversees Freddie Mac and Fannie Mae, earned a response with, “Your letter requests a formal confirmation regarding the Enterprises’ policies for purchases of loans on 2-to-4-unit condominium projects, including projects that were previously single-family homes with an ADU that are converted to condominiums. Information about the Enterprises’ current policies for condominium projects can be found through these links: Fannie Mae Selling Guide Section B4-2.1-01, General Information on Project Standards, Fannie Mae Glossary 2-to-4-unit Condominium Project Characteristics, Freddie Mac Selling Guide Section 5701.2 Condominium Project Review and General Condominium Project Eligibility, and Freddie Mac 2-to-4-unit Condominium Projects.

Capital Markets

For MLOs who locked their borrowers at the lows, I continue to be asked about why extending a rate lock, if even for a few days for something beyond the control of the borrower, costs money. The cost to extend a best-efforts lock reflects the cost incurred by Secondary Marketing to move the corresponding hedge to reflect the new closing date. It’s an easier concept to understand if you acknowledge the inequity of hedging a mortgage pipeline: best efforts locks, which may or may not close, are given for FREE to Loan Officers, then hedged with mandatory security instruments. When a lock extension is granted, the hedge needs to reflect the change in delivery dates.

For example, when a loan comes in with a 45-day lock, your hedge model will pull from your LOS the estimated closing date, to best execute that loan for delivery into the secondary markets. In the process it determines what month security needs to be sold to off-set the 45+ days of interest rate exposure that loan will incur. If that 45-day lock was taken out January 2nd, with an February 15th estimated funding, a February security would probably be sold as the hedge instrument; a ‘only 7 days’ extension might just mean that loan now best executes into a March commitment, meaning you now must buy-back your February coverage, and sell a March security to match the new closing date. This “roll,” from a front month security to a “back” month, has a transactional cost. Much of the fee charged to extend a loan with your secondary group reflects this cost.

In the next four days we’ll have some Fed surveys, retail sales, import prices, housing-related data, and Michigan sentiment on Friday. Besides bills, Treasury supply consists of $13 billion reopened 20-year bonds on Wednesday and $18 billion 10-year TIPS on Thursday. But today there isn’t much to move rates (NY Fed manufacturing for January, Fed Governor Waller speaking, the Treasury auctioning off $75bn of 3- and $68bn of 6-month bills followed by $70bn 42-day CMBs at 1:00pm, and some bank earnings). Last Friday the U.S. 10-year T-note closed yielding 3.95. This morning it’s at 4.01 while current coupon Agency MBS prices are worse by about .250. (The 2-year is at 4.20.)

Employment

A well-capitalized IMB, based in the NJ/PA tri- state market, is seeking Loan Officers, Sales Teams, or possible acquisition opportunities of small to midsize IMBs in NJ, NY, CT, FL, and PA, while expanding in MD, DC, VA, NC, and SC. The IMB’s focus is a highly personable and high touch experience for LOs and Realtors. Organizationally lean, very competitive pricing, a wide array of products, and much higher LO Comp than what is offered by other larger IMBs. The focus is to attract serious loan officers who want an unparalleled service, where your voice matters and you have a seat at the table in growth. If interested, message Anjelica Nixt for a confidential discussion.

“Sagent named #32 on Builtin’s best remote places to work! Sagent is proud to share our recognition from BuiltIn’s 2024 Best Places to Work awards. Securing positions as 32nd among Top 100 U.S. Remote Companies and 76 among Best Mid-Size Companies in the US, this achievement is not just ours, but a direct result of our dynamic team of talented associates who live our values of relevance, reliability, and relentlessness and exemplify intentionality in fostering this cohesive culture in a fully remote setting. Read the blog to learn more here, and we’re hiring! If a dynamic, remote-first culture sounds like your style, head on over to our Careers page to see if there’s a good fit. Come be a part of the best team in fintech that’s building the future of servicing.”

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

If you’ve been actively house hunting for a while, chances are you’ve come across a real estate listing that was referred to as a HUD home. But what exactly does that mean? Is this type of home worth considering as your next purchase?

Discover everything you need to know about HUD homes and whether this type of home is right for you. While there is some risk involved, the potential for reward is also great. So read on and see if you should start searching for HUD homes in your area.

What is a HUD home?

Owned by the U.S. Department of Housing and Urban Development (HUD), a HUD home is a type of residential foreclosure. Traditional foreclosures occur when a homeowner defaults on their home loan.

If they can’t reach a repayment agreement with their lender, the lender takes ownership of the property. Then, the lender lists the property for sale to get the balance owed on the mortgage loan.

FHA Insurance and Its Impact

Foreclosed properties often sell well below the amount owed to the lender, who then takes a loss on the property. However, if the home is insured by the Federal Housing Administration (FHA), the foreclosure process happens a little differently.

The Federal Housing Administration is actually a department within HUD. It doesn’t make loans directly, but it does help ensure borrowers with a specific type of loan to help encourage homeownership. The FHA also provides mortgage insurance to FHA-approved lenders.

FHA mortgages entice lenders to originate and fund the loan since underwriting standards are slightly less stringent than a conventional loan.

However, when a home financed by an FHA loan goes into foreclosure, HUD reimburses the original lender for the outstanding loan balance. HUD then takes over ownership and sells it to compensate for the cost it paid to the lender.

The Process of Buying a HUD Home

When a regular home is listed for sale, the seller works with their real estate agent to come up with a price based on comparable houses in the area.

When a HUD home is put on the market, it goes through an appraisal process to determine its fair market value. The list price also considers any necessary repairs that are needed in the home.

The HUD Bidding System

With a normal listing, you’d tour the house and make an offer to the seller via your respective real estate agents. It specifically helps to work with an agent who has experience with HUD homes, but it’s not necessary.

While you still tour HUD homes with your real estate agent, the offer process is entirely different. Rather than making a traditional offer, you place a bid. If your agent is registered with HUD, they can submit the bid online for you.

There is a designated bid period. Once yours is submitted, they will compare it to any other bids that have been received. If yours is the highest offer, you’ll get an acknowledgment from HUD.

At that time, your agent will send you a contract, which you have 48 hours to submit to your regional HUD office. This is the only way to lock in the home and get the ownership underway. Otherwise, they could put it back on the market. So, always submit your documents in a timely manner.

HUD Home Buying Process

You often only get one shot at placing an offer on a HUD home, so it’s important to develop an informed strategy beforehand. While you may think it warrants an automatic lowball offer, this isn’t necessarily the case, especially if you live in a competitive real estate market.

In addition to looking at comps in the area and the home’s condition, you can also base your offer on the length of time the home has been on the market. If it’s new on the market, you probably don’t want to come in too low on your offer price. This is unless you’re only interested in the property at a certain price point.

HUD Home Costs and Financing Options

HUD often accepts offers between 85% and 88% of the list price. That’s a good frame of reference when developing your bid unless, of course, someone comes in with a higher offer. If the property has been on the market for several months, you definitely have more leverage in making a lower offer.

Your deposit will generally range from $500 – $2,000. Your mortgage payments will depend on how much your down payment is. The higher your down payment amount, the lower your mortgage payments will be. Closing costs usually average to be about 3-4% of the purchase price of a home. However, if you buy a HUD home, HUD may pay most of your closing costs.

Assessing Risks and Rewards in ‘As-Is’ HUD Home Sales

That’s because, unlike most regular listings, HUD homes are sold as-is. So, regardless of what work needs to be done, HUD will not take care of it to sell the house. But, of course, this is typically true of any foreclosed property.

That’s why it’s vital to have an inspection completed before you make an offer. Unlike other buying processes, you should have the inspection done first. Then, use it to inform your bid offer because you can’t renegotiate based on the results.

It’s definitely worth spending a couple of hundred dollars to ensure the needed renovations are within your scope.

Pros and Cons of Buying a HUD Home

Purchasing a HUD home can be an attractive option for many buyers, offering a unique blend of financial advantages and potential challenges. Understanding these pros and cons is crucial in making an informed decision.

Pros

  • Competitive pricing: One of the most significant benefits of HUD homes is their affordability. These properties are typically priced below-market value, providing an excellent opportunity for buyers to secure a home at a reduced cost. This pricing advantage makes HUD homes particularly appealing to first-time buyers and those looking for good value in the housing market.
  • Accessible down payments: HUD homes often come with the advantage of requiring lower down payments. In some cases, buyers may be eligible to make a down payment as low as 3.5% of the purchase price. This lower threshold can make homeownership more accessible, especially for those who may struggle to save for a larger down payment required in traditional home purchases.
  • Reduced Closing costs: Another financial benefit of purchasing a HUD home is the potential for lower closing costs. HUD may cover a portion of these costs, reducing the overall expenses that buyers need to pay out-of-pocket. This can make the process of buying a home more affordable and less daunting financially.

Cons

  • ‘As-Is’ condition: One of the primary challenges of buying a HUD home is that they are sold in ‘as-is’ condition. This means that the buyer assumes responsibility for all repairs and renovations needed, which can sometimes be extensive. Potential buyers should carefully consider the condition of the property and be prepared for the possibility of unforeseen repair expenses.
  • Lengthier closing process: The process of closing on a HUD home can be more time-consuming compared to traditional home purchases. This is due to the additional paperwork, approvals, and procedures required by the government. Buyers should be prepared for a potentially prolonged process and factor this into their planning.
  • Additional financial considerations: While HUD homes can offer lower initial costs, they may require additional financial commitments, such as escrow deposits for repairs. These added expenses can arise from the need to address issues not covered under the ‘as-is’ purchase agreement. It’s important for buyers to be aware of and budget for these potential extra costs.

Financing Your HUD Home Purchase

You don’t need your full offer price in cash; in fact, you can use just about any loan type. The trick is to make sure the home’s condition qualifies for the loan type’s eligibility requirements.

Government-backed loans such as FHA, VA, and USDA loans have stricter requirements than conventional loans. For example, an appraiser for FHA loans looks for the following items:

  • A lot sloping away from the house
  • Windows in each bedroom
  • Chipped lead paint (in pre-1978 homes)
  • Handrails on stairs
  • Sufficient heating system
  • Solid roof and foundation

If the HUD property does not meet these basic requirements, you’ll need to find alternative financing. A conventional loan appraisal is more concerned about the home’s market value and comes with stricter credit and income requirements.

There are options, however, to finance repairs. One is a 203(B) loan, which allows you to finance up to $5,000 in repairs. The other is a 203(K) loan, which finances up to $35,000 in repairs.

Finding HUD Homes in Your Area

Your real estate agent can help you locate HUD homes in your area, especially if that’s their area of expertise. However, to start looking on your own, you can access HUD’s database of homes for sale. This online tool allows you to search several criteria to find the home you want in a specific location.

You can search by state, county, or city, as well as price range and home features. In addition to the number of bedrooms, bathrooms, and square footage, you have the option to search for a limited number of special features, including:

  • Fireplace or wood stove
  • Single or multiple stories
  • Outdoor amenities, like patio, pool, porch, or fence
  • Parking type
  • Housing type
  • Property age

Despite not being as user-friendly as a site like Zillow, the HUD website allows you to browse listings and find something that meets your needs.

Can investors buy HUD properties?

Purchasing a foreclosed home as an investment can be a great idea, assuming you’ve done ample research into your local market.

If you’re ready to jump into the real estate game as a landlord or Airbnb host, you should certainly add the HUD portal to your property source list. However, it’s important to realize that there are a few restrictions for investors.

As we mentioned earlier, HUD properties are listed in bidding periods. The first period is an “exclusive listing period” and only accepts offers from owner-occupant buyers, non-profit organizations, and government entities. In other words, they are initially offered to buyers who intend to live in them as their primary residence.

After that 15-day period, if no offer has been submitted, HUD opens up an extended bidding period to investors. At that point, you may submit a bid to purchase the property as some type of investment.

What happens if a HUD property is not sold?

HUD lists its foreclosure homes for six months before taking other actions. If the home is not sold within that time frame, they can sell the property to a nonprofit or government agency for $1. The home must then be transformed into either affordable housing for families within the community, or benefit the area in some other way.

HUD also offers programs for public servants such as teachers and police officers. This program, called the Good Neighbor Next Door, provides teachers, police officers, firefighters, and EMTs with a 50% discount off the list price of eligible HUD homes.

This program aims to revitalize and strengthen communities by having public servants live and work in the same place.

Is a HUD Home Right for You?

Be aware of the potential for both risk and reward. Start by evaluating your wishlist for a home, whether it’s for yourself or as an investment.

If you’re looking for a move-in ready house, it may not be right for you. It’s also not a good idea if you’re risk-averse. Even if you perform a home inspection, it may not catch every single problem with a home.

Even after the former owner vacates the property, it takes time for the original lender to process the paperwork and transfer the property to HUD. Then HUD must perform an appraisal and go through the listing process. This lengthy process can lead to additional neglect and damage incurred to the property.

The Reality of Distressed Properties

On the plus side, you may have the opportunity to gain some quick equity, depending on the location, condition, and final sales price. This is especially true if you’re willing to buy a fixer-upper.

As long as you understand the process and the associated risks of buying a HUD home, you can potentially put yourself into a better financial situation. This includes a lower monthly mortgage payment and greater home equity.

Just be realistic about what you’re willing to put into a home (both time and money). Furthermore, play out worst-case scenarios and make sure you’re ok with each of them. With an open and informed mind, you could get a great housing deal with HUD.

Frequently Asked Questions

How do I purchase a HUD home?

You can purchase a HUD home by submitting a bid through an approved real estate broker, or by submitting an offer directly to HUD.

Who is eligible to purchase a HUD home?

Anyone can purchase a HUD home. However, certain restrictions may apply, such as income limits and owner occupancy requirements.

Is there a minimum bid requirement for HUD homes?

No, HUD does not specify a fixed minimum bid amount for its homes. The acceptable bid varies based on the property’s appraised value and market conditions. Very low bids are less likely to be accepted, especially during initial periods reserved for owner-occupants. For specific bidding information, consult the HUD Home Store or a real estate agent with HUD experience.

Can I buy a HUD home as a vacation property or second home?

HUD homes are primarily intended for buyers who will use them as their primary residence. There are specific periods during the bidding process when only owner-occupant bids are considered. However, if a HUD home remains unsold after these periods, it may become available for purchase as a vacation or second home.

Is it possible to negotiate the price of a HUD home?

Unlike traditional real estate transactions, the price of a HUD home is generally non-negotiable. HUD homes are priced at fair market value, considering their condition. The bidding process is the primary way to determine the final sale price, and HUD will accept the highest reasonable offer.

How long does it take to close on a HUD home after my bid is accepted?

The closing process for a HUD home can vary, but it generally takes longer than a traditional home purchase. Typically, you can expect the closing process to take anywhere from 30 to 60 days from the acceptance of your bid. This timeframe can be affected by various factors, including the type of financing and the specific procedures of your local HUD office.

Are HUD homes eligible for home warranties?

HUD homes are sold ‘as-is’ and do not come with warranties. Buyers are encouraged to have a home inspection before making a bid to understand any potential issues. However, after purchase, homeowners can independently obtain home warranties from private providers for future protection.

What is the ‘Good Neighbor Next Door’ program?

The Good Neighbor Next Door program is a HUD initiative aimed at encouraging community revitalization. This program offers a significant discount (up to 50% off the list price) on eligible HUD homes to law enforcement officers, teachers, firefighters, and emergency medical technicians who commit to living in the property as their primary residence for at least 36 months.

Source: crediful.com

Apache is functioning normally

There seems to be an exorbitant number of young people posting all kinds of pictures and stories about their incredible (and expensive) travels online. And alongside that, most of us young people are struggling just to find affordable housing. So what gives? How is this generation of Americans both more broke than other generations, and also traveling so much? Well, we’re diving into some answers here, so keep reading!

1. It’s All on Credit

Photo Credit: Shutterstock.

One user said, “I have a friend who takes 4 or 5 vacations annually. She and her husband are not wealthy by any means. I asked how they could possibly afford it (bc I was jealous), and she said it was all on credit. I stopped being jealous after that.”

It’s true: a lot of people use credit cards to travel and then make payments afterwards to catch up. Sure, you get cool experiences, but is it worth it to have standing debt that’s accruing interest at an exorbitant rate? Most of us would say no.

2. Debt and Nihilism

Photo Credit: Shutterstock.

One Redditor shared, “Debt and nihilism. A lot of them kind of think the world is going down the crapper and their lives will only get worse from here on out, so might as well enjoy it.”

Another user replied, “Pretty much, honestly. I’m 26, a relatively s- job. Want to start a career, but that’ll require more school, which is fine. The [debt] will only set me back around a year, and I’ll make a bit more thereafter. Even after that, I won’t make enough to both afford a house and contribute a lot to retirement, though; I might as well get my money’s worth in life in my 20s and 30s while I’m still a beast physically (ski vacations, backpacking, running every event from 800 to ultras, hopefully after graduating more expensive stuff even like mountaineering, alpine touring).”

Ok, we understand this view a little better. It’s true, the world is changing rapidly and there’s a lot of joy to be found in traveling while you’re young, and strong enough to have the more intense adventures. But just proceed with caution, especially where credit cards are involved.

3. Rich Parents

Photo Credit: Shutterstock.

“Rich parents,” one user posted.

Another user commented, “Definitely rich parents or running up credit card debt. I went to school for 8 years and ran up around 300k in [debt]. About a year or two after graduating, a classmate shared that he paid all of his student loans off. While I was funding everything with [debt], he was being heavily funded by his parents, so his [debt] was a fraction of what mine was, and he knocked it out fast.”

To be fair, if we had wealthy parents, we’d probably travel too. Probably the worst part about this one is that young people with wealthy parents are more often than not quite out of touch with the struggle middle-class people have to save up and travel. So, compassion might be the key here. That, and maybe keeping some of those gorgeous photos in a private chat instead of an Instagram feed.

4. Credit Cards

Photo Credit: Shutterstock.

One user shared, “Credit cards are a [hecking] drug.”

Another user commented, “Yup I worked collections for too long, and I would see people barely make the minimum payment and then turn around and ask how much [they had] left to spend. Crazyyyyyyyyyyyy.”

One added, “When I was working in retail, I had an amicable ‘cash or card’ chat while ringing someone up when I said something like, ‘I’d just as soon use my card for everything and get the points.’

“The customer, 10+ years older than me and spending a couple hundred dollars, kind of scoffed and said, “Yeah, if you pay it off!”

“That’s not to knock anyone using credit cards to make ends meet. Still, it’s stuck with me because she was fully insinuating that it was unreasonable for anyone to pay off their balance reasonably regularly. Like, ma’am, are you sure you want to buy this dress?”

5. They Live With Their Parents

Photo Credit: Shutterstock.

Generational living has been a feature of many cultures both across the glob and throughout history. In fact, Americans are more of an anomaly in this regard than we usually think. But taking the opportunity to live with your parents, especially if you have a healthy relationship with them, can set you up financially for more than just travel, although that’s certainly one motivation to practice generational living!

One Redditor commented, “They live with their parents.”

Another user replied, “My dad lived with his mom until he was 45. I live with my parents as well. No rent makes a huge difference.”

6. Hard Work or Rich Parents, Possibly Both

Photo Credit: Shutterstock.

One Redditor added to the thread, “I work with a 24-year-old. After college, he got an entry-level job at our company (he was 22) and did really well. He probably makes $70K+, has a roommate and has no kids—plenty of extra money.

“My stepdaughter is 21, works part-time at a coffee shop, and her parents pay her rent, her tuition and most of her expenses. She also has plenty of extra money. So, either hard work or rich parents, possibly both.”

7. High-Income Jobs

Photo Credit: Shutterstock.

While we’re in high school, most of us are told to follow our dreams. And it’s really life-changing to have a job you enjoy versus a job you tolerate or really dislike. But some of us have the talents and dreams that guide us towards higher paying jobs, and that’s a fact we all have to come to terms with. Somebody who loves math and dreams of engineering will probably make more than somebody who has a passion for children and teaching.

“Rich parents or high-income jobs,” one user stated.

Another Redditor replied, “High-income jobs really hit you differently when you don’t have any dependents too.”

8. Saving Up

Image Credit: Shutterstock.

“When I was a new grad, a bunch of my friends/acquaintances moved out and lived independently. Had the nicest clothes and went out to every event. I lived with my parents and saved. (Lucky enough that they didn’t need my help.)

“Well, I’m in my early 30s now. I have my own condo; it’s not the nicest car, but I’m happy with it. All my friends/acquaintances had to move back home because they couldn’t afford to live independently anymore.

“I don’t know their financial situation, but they always ask how I could afford it. My parents aren’t rich, but living with my parents after I graduated definitely is the reason I could eventually move out and buy my own place,” shared one online user. 

9. Being an “Influencer”

Photo Credit: Shutterstock.

It’s not a secret that much of what we see online, especially influencer content, is mostly illusion. There are private jets to rent as a photo set; you can go get your pictures and then fly a budget airline. All the appearance of being rich; none of the reality.

One user posted, “Where do you ‘see’ these people? Are these people you know or people you see on social media?

“Being an ‘influencer’ is a freelance entertainment job. These guys earn money by appearing to have perfect lives in every way. If they don’t provoke envy or aspiration, they aren’t making as much money as possible. Don’t let yourself be sold a bill of goods, okay? There’s a man, not a wizard, standing behind that curtain.”

10. Inheritance

Photo Credit: Shutterstock.

Ok, it’s hard to fault people for inheriting money enough to travel. And some genuinely do. But that doesn’t make it any easier to follow along with their adventures while we work away in our offices.

One user posted, “Inheritance, trust fund babies, parents’ gifts.”

11. Work in a Tourist Attraction

Photo Credit: Shutterstock.

Credit cards seem to be the biggest answer. Young people aren’t afraid of debt in the way many others are. And while there’s nothing inherently wrong with putting trip expenses on a credit card if you know you can pay it off, there’s definitely a risk to traveling on credit too often. Your future self may not thank you.

One user shared, “I work in a tourist attraction. I’ve seen many 21-25-year-olds from the U.S. and other continents travelling here. A lot of them are in college! I’m the same age as them, and I wasn’t able to afford to go travelling or party while in college. Edit: I would like to note a majority of them are paying with credit too.”

12. There Are More Affordable Options if You Plan It Right

Photo Credit: Shutterstock.

“Everyone else has covered the how, but I do want to mention how important it is to travel when you can. There’s no reason to make it lavish to get the benefit from it. There’s lots of more affordable options if you plan it right. Start with weekend road trips. I never left the country (USA) until I was 25, and now I’ve been to 16 countries (although some were for work trips). I try to take one proper vacation a year. Every other year, I do something more extravagant (that I have time to save up for), and the off years, I do something domestic.

“I think it’s the best gift you can give yourself to see how other people live and experience their culture. It expands your horizons and also helps you appreciate home,” one user added. 

13. Making Money off Scams

Photo Credit: Shutterstock.

One user shared, “A lot of people I’ve seen in their 20s are doing fraud. I don’t know in detail how they do it, but it’s something with CPNs and people’s social security. I’ve seen people with all these designer bags and designer clothes and going on all these trips. Yet they work in a warehouse or a low-paying job. They are, without a doubt, scamming. Also, I know a lot of women deal with men who are willing to spend money on them. I have friends who will get flown out by men they are dating. These men also seem to be doing illegal activities. Trust me, a lot of people out here are not living right. They are risking their freedom for a fake lavish lifestyle.”

14. Selling Themselves Online

Photo Credit: Shutterstock.

One user commented that most likely, lots of influencers have switched to having paid subscribers to their accounts. And while it’s not exactly easy money for just anyone, a lot of people are succeeding at drawing in people who are willing to pay for their content. It takes a pretty high comfort level with posting yourself online for others’ viewing pleasure, but those who have the guts and the success will probably have the ability to travel on that money too.

15. They Know Someone Who Works for an Airline

Photo Credit: Shutterstock.

“People give others gift cards and airline points and know people who work in airlines. So, if you know someone who works for an airline, you can [often] get a $100 guaranteed ticket for a flight. Or buddy pass is free! Also, work in an airline that gives you free seating when empty seats are available. Also, parents sell their homes to their kids for $80K, and the home value is $500K plus.

“They take out a second mortgage on the house to live it up in their 20’s and slowly roll into their 30s and, by 40’s, divorced and in Debt. Also, Credit card points from people to buy airline tickets and travel expenses. They also have their parents credit cards and order ride shares with accounts of their parents that have corporate accounts credit cards on them. Females are more likely to have Dad’s credit cards for emergencies and Guys more likely to have [Mommy’s] credit cards that stepdad or birth dad pays for. Also, they have credit card debt that they file Chapter 7 on, and parents most likely pay the vehicle/ rental payments. Now, they use their parents’ vehicles to make money doing rideshare/or gig work while their parents pay the rent/ and the vehicle they pay bills. Parents paid for the college! Things I have learned about from people doing rideshare and people I have met in life,” posted one user. 

What do you think of the statements listed above? Share your thoughts down in the comments!

Source: Reddit.

10 Actors Perfectly Cast for Their Character Roles

Photo Credit: Warner Bros.

Have you ever watched a movie or show and been completely lost in it because of how well an actor or actress became their character? Check out this article for a whole list of actors who were perfectly cast!

11 Vampire Movies That Will Make You Thirst for More

Photo Credit: Columbia Pictures.

You know that feeling where you’re on a movie kick in a certain genre, but you seem to run out of good movies to watch? Well, if you’re down for a vampire movie or three, check out this article for the best ones out there!

10 Incredible Movies That People Rated 10 Out of 10

Photo Credit: Universal Studios.

It’s pretty hard to replicate the experience of watching your favorite movie for the first time, but we’ve put together a list of movies that people have rated at a perfect 10/10. Next time you need a good movie to watch, check this out!

10 Famous People Who Canceled Themselves With Their Own Stupidity

Photo Credit: Shutterstock.

We’ve all been there: you make a comment you haven’t thought through at all, and the whole room goes silent at what you’ve just said. But can you imagine doing that as a famous person—and getting canceled? Check out this list of celebrities who did just that!

13 Things You Shouldn’t Do When You’re in the US

Photo Credit: Shutterstock.

Are you planning a trip to the US? Culture varies a lot between countries, even countries that share borders. So if you’re headed to the good old U. S. of A, here are a few pointers to make your travels go more smoothly!



About the Author



Source: financequickfix.com

Apache is functioning normally

There’s cautious optimism in the air among area real estate professionals looking into the 2024 home sales market.

If trends continue, they see mortgage rates going down and listings going up.

The key word is “if.”

“Looking ahead to 2024, we anticipate mortgage interest rates to settle in the 6% range, which will attract even more buyers into the market, especially come spring,” said Jeanette Schneider, president of Re-Max of Southeastern Michigan.

“Current homeowners who held onto their home due to a favorable interest rate may decide their interest rate isn’t worth keeping a home that no longer meets their needs, and that should bring a bit more inventory to the market.”

Adds Karen Kage, chief executive officer of Realcomp II Ltd., Michigan’s largest multiple listing service: “We are hopeful for interest rates to continue to trend downward in the new year and consumer confidence levels to rise. As we stand today and look ahead, those are, perhaps, the biggest factors in determining what we might see in 2024.”

Nationally, industry analysts and veterans offer a range of predictions for the upcoming year. Among those:

• Buying a new home will remain expensive, according to Zillow, while Redfin said the median sale price could retreat by 1% in 2024

• The market will still be challenging for first-time homebuyers, but an influx of new apartment units could help manage inflation, according to Lawrence Yun, chief economist for the National Association of Realtors

• Sales of existing homes will rebound in 2025, with home-buying costs leveling off in the second half of 2024, according to investment banker Goldman Sachs

• In Michigan, tech startup real estate tracker Houzeo predicted home sellers will return to the market in 2024 and interest rates will stabilize in the second half of the year.

Locally, Schneider predicted a “slight uptick in home sales in 2024, along with a steady, but moderate increase, in home prices.”

“As boomers consider downsizing, we expect to see more cash offers in the market, providing a challenge for first-time buyers,” she said.

The Press & Guide asked area real estate specialists — with a  combined experience of more than seven decades — to size up the market for the next year.

Interviewed for this story are:

• Susie Armiak, Realtor, MBA Realty Powered by Real Estate One, Grosse Ile, three years experience as a licensed Realtor and more than 25 years as a residential home builder

• Eric Blaine, associate broker and branch manager, Dearborn Office, Real Estate One, 10 years experience

• Tracey Solomon, Realtor, Re/Max Masters, Davis/Solomon Realty Group, Flat Rock, more than four years experience

• Maria Starkey, Realtor, Starkey Team, MBA Realty, Grosse Ile, 24 years experience. Also contributing: Michael Starkey, Realtor

• Benjamin Welch, associate broker, Century 21 Curran & Oberski, Dearborn Heights, 18 years experience, including owning and operating Street Rock Management (property management) for five years

  • Susie Armiak

  • Eric Blaine

  • Tracey Solomon

  • Michael and Maria Starkey

  • Benjamin Welch

Here are edited excerpts of their comments about the year ahead:

Q: Strong demand and tight inventory have defined the real estate market in 2023. How do you see those factors and others shaping the 2024 home sales market?

Armiak: I believe we will continue to see that same trend.  Specifically because the higher interests this past year had many sellers/buyers sitting on the fence and new home construction is still behind the demand.

Blaine: Inventory has begun to rise in many markets and is expected to continue that trend in 2024. We expect demand to remain high, as well, and rising inventory will help.

Solomon: Demand is still outpacing supply. Unless this changes, we can expect more of the same seller-weighted market. Election years are historically slower as buyers and sellers may feel unsure about changing economic policy. Post-election, the market typically stabilizes. I suspect that if demand remains high and inventory low, we may not see that expected slowdown. It would be offset by the continued supply/demand pressure.

Starkey: The current market of strong demand and tight inventory is expected to continue into 2024. More buyers than houses continue to be the trend. This is keeping prices in the Downriver market on the high end for homes that are well-maintained and updated. The year ahead will likely continue to be a seller’s market. Homes in need of updating or with deferred maintenance tend to sit on the market longer, resulting in lower noncompeting offers.

Welch: Predicting the 2024 housing market is like forecasting the weather in Michigan – it’s an assumption with a dash of optimism. If interest rates remain the same, the days a home is on the market will continue to increase.

Q: Mortgage interest rates exceeded 7% in 2023. Where do you see mortgage rates in 2024 and how will that affect sales?

Armiak: The most recent Fed meeting stated they would be dropping interest rates three times in 2024 and we are already noticing the benefits of the recently lowered rate, currently at 6.6% for a 30-year fixed rate. (That rate may vary for buyers based on credit score, income and down payment amount.) This rate drop will entice sellers and buyers to make their move.  My advice is the sooner the better because it’s going to be crowded in the marketplace once again. Be prepared to make swift and decisive decisions.

Blaine: Rates have held steady for a while and even declined slightly. I expect rates to hold somewhat steady in 2024, allowing more consumers to get off the fence and jump back in the market.

Solomon: Mortgage rates seem to be slowly dropping, which is great news for buyers and sellers. If rates continue to decline, more buyers will enter the market and demand will (again) increase. That will mean a continued shortage of homes and continued pressure on buyers to offer incentives to encourage sellers to accept their offers (fewer contingencies, appraisal guarantees, etc.)

Starkey: Interest rates are anticipated to come down into the 6% range in 2024, which likely will bring more buyers into the market. This may encourage more sellers to list their homes for sale. However, I expect home values will stay steady as demand for homes is expected to continue.

Welch: Increasing interest rates have been a major topic of discussion this year. It appears the Federal Reserve is done with rate hikes and Fannie Mae announced that interest rates could drop into the 6% range by the second quarter. If that happens, I expect a flurry of buyers to hit the market and for home prices to continue to rise.

Q: What is your best advice to potential home sellers for 2024?

Armiak: Connect with an experienced Realtor now to generate your personal marketing strategy. There are multiple items that need to be addressed prior to listing your home. Being prepared will put you in the best position to achieve your goals.

Blaine: It is a great time to sell. Values are up and demand is high.

Solomon: Once you’ve found an agent you trust, listen to their advice. Prepare your home for sale, but don’t overdo it. Timing is everything. Waiting to list until it’s perfect can cost you thousands. Consult your listing agent to prioritize your timing and task list. Utilize a pricing strategy that’s proven effective.

Starkey: Consider taking care of any potential deferred maintenance that could bring down home value. Also, be proactive by having a private home inspection done in advance to address any issues that may come up in a buyer’s private home inspection. This can reduce obstacles throughout the transaction. Last, minimize clutter, reduce excess furnishing that may make the space look smaller and — most importantly — provide a clean home for buyers to tour.

Welch: My advice is to hire a professional so you know all of your options. A professional Realtor will provide guidance, resources and a proven plan to facilitate the sale.

Q: What is your best advice to potential home buyers in 2024?

Armiak: Connect with an experienced Realtor now and begin the pre-approval process with your mortgage lender. It generally takes three months from start to finish. The more prepared you are, the stronger your chances are of getting the home of your dreams. And remember, you can always refinance, but you can’t retrofit the home appreciation value as they continue to rise at an annual rate of 4.7%, per FHFA reports.

Blaine: With value rising — a trend we expect will continue — now is the time to buy before values rise more. Waiting will only cost more and interest rates will not drop enough to help overcome appreciation.

Solomon: Find an agent you trust and communicate your needs and wants. Be financially prepared; your pre-approval matters. Set a home budget that works for your life, not just your balance sheet. Love to travel? Eat out? Give charitably? Factor that in. Adjust your price point to accommodate. (Yes, I’m suggesting you spend less so you can live more.)

Starkey: Get into the market early. Homes are hitting the market every day — not just in spring. Buyers who get a head start should have less competition than those who wait for more homes to choose from. If potential buyers find a home they love, go for it. If interest rates come down, you can always refinance. There are mortgage companies that offer a “no fee” refinance within the first two years of purchase.

Welch: If you are waiting for interest rates to come down before buying a home, it’s time to rethink your strategy. It is best to buy now because if interest rates drop, the number of buyers competing for the home you want will increase significantly, making it more challenging to buy that home.

Q: What communities do you see as most active for home sales in 2024 and why?

Armiak: I believe all communities will enjoy accelerated activity with the promise of lower interest rates, including those looking for second homes and investment properties. We are already seeing an increase in new listings in what is typically known as a quieter time. However, driving factors will continue to be the usual suspects: marriage, family growth, job change, death and divorce.

Blaine: Southeast Michigan markets, including Dearborn, are going to continue strong sales in 2024.

Solomon: Flat Rock, Woodhaven, Wyandotte and Southgate. All show increased values and searches. “Most active” is a hard metric to use as a measurement. A small community won’t show big sales numbers. However, highly rising values and quick list-to-pending sales dates show they are desirable and likely selling at or above asking with appraisal guarantees. Grosse Ile is a good example.

Starkey: The current market of strong demand and tight inventory is expected to continue into 2024. More buyers than houses continue to be the trend. This is keeping prices in the Downriver market on the high end for homes that are well-maintained and updated. The year ahead will likely continue to be a seller’s market. Homes in need of updating or with deferred maintenance tend to sit on the market longer, resulting in lower noncompeting offers.

Starkey: All Downriver communities will be active for home sales in 2024. The communities with more affordable housing for first-time buyers may see more activity as those buyers get away from renting. Of course, we need homes to come up for sale. Many homeowners are getting older and either moving to warmer climates or looking for less housing maintenance. Investors also like to purchase homes to add to their rental portfolio or to renovate and sell. The “step up” housing may not be as active as many of those homeowners are enjoying 2% to 4% interest rates and are feeling very comfortable with their current housing costs.

Welch: During November in the Downriver area, the number of homes for sale declined by 32% compared with previous months. It’s still a competitive market. With interest floating around 7.5%, there are many buyers just sitting on the bench waiting for rates to come down before they make their move. Imagine what it will be like if, and when, that happens.

Source: pressandguide.com

Apache is functioning normally

The seniors who are often the parents of Generation X and Generation Y (millennials) could become a pronounced expense for their kids in the coming years, but adult children also want to see their parents successfully age in place.

This is according to a commentary from Sarita Mohanty, president and CEO of elder financial advocacy organization The SCAN Foundation in a commentary published by Fortune.

There will be 16 million “middle-income” seniors in the U.S. by 2033, Mohanty said, citing a 2022 study from the National Opinion Research Center (NORC) at the University of Chicago.

“As NORC’s research summary explains: ‘Many will struggle to pay for the health, personal care, and housing services they need. […] Even with home equity, nearly 40% will not be able to afford assisted living,’” she cited.

These kinds of expenses have only become more burdensome over time, Mohanty said.

“In 2002, adults over 65 spent $48,000 (adjusted for inflation) a year on average, according to data from the Bureau of Labor Statistics,” she wrote. “Today, the average is $58,000, a more than 20% increase. The average rent and medical costs for those in assisted living currently stand at $65,000 a year.”

The far and away preference for both U.S. seniors and their children is for the seniors to age in place in their own homes, Mohanty said. Citing a survey from Today’s Homeowner, 89% of Americans at or over the age of 55 want to remain in their homes.

But a late 2023 survey by CNBC found that nearly 60% of Americans feel they are not on track to retire comfortably, Mohanty pointed out, and that lack of assurance in their own retirement security means the younger generations are often unprepared to assume any support position for their parents.

“Something has to give,” she said. “If you’re in the sandwich generation – Gen X and older millennials – and want to share in the responsibility for their parents’ retirement, you should begin by thinking of your parents’ retirement plans in the context of your own.”

In December, the U.S. Department of Housing and Urban Development (HUD) announced a $40 million notice of funding opportunity to connect seniors in affordable housing with resources that could help them age in place.

The reverse mortgage industry often describes its product as a vehicle that can help older Americans remain in their homes since a core requirement of any reverse mortgage is for the borrower to remain in the property as their primary residence.

Source: housingwire.com

Apache is functioning normally

SANTA CRUZ — 

You can sense it in the ubiquitous “Help Wanted” posters in artsy shops and restaurants, in the ranks of university students living out of their cars and in the outsize percentage of locals camping on the streets.

This seaside county known for its windswept beauty and easy living is in the midst of one of the most serious housing crises anywhere in home-starved California. Santa Cruz County, home to a beloved surf break and a bohemian University of California campus, also claims the state’s highest rate of homelessness and, by one measure based on local incomes, its least affordable housing.

Leaders in the city of Santa Cruz have responded to this hardship in a land of plenty — and to new state laws demanding construction of more affordable housing — with a plan to build up rather than out.

Many Santa Cruz business owners back the city’s plan for high-rise development, saying the city needs more affordable housing for servers and retail workers.

(Brian van der Brug / Los Angeles Times)

A downtown long centered on quaint sycamore-lined Pacific Avenue has boomed with new construction in recent years. Shining glass and metal apartment complexes sprout in multiple locations, across a streetscape once dominated by 20th century classics like the Art Deco-inspired Palomar Inn apartments.

And the City Council and planning department envision building even bigger and higher, with high-rise apartments of up to 12 stories in the southern section of downtown that comes closest to the city’s boardwalk and the landmark wooden roller coaster known as the Giant Dipper.

“It’s on everybody’s lips now, this talk about our housing challenge,” said Don Lane, a former mayor and an activist for homeless people. “The old resistance to development is breaking down, at least among a lot of people.”

In recent years, Santa Cruz has approved development of modern multistory housing complexes, part of a broader effort to add housing stock.

(Brian van der Brug / Los Angeles Times)

Advertisement

Said current Mayor Fred Keeley, a former state assemblyman: “It’s not a question of ‘no growth’ anymore. It’s a question of where are you going to do this. You can spread it all over the city, or you can make the urban core more dense.”

But not everyone in famously tolerant Santa Cruz is going along. The high-rise push has spawned a backlash, exposing sharp divisions over growth and underscoring the complexities, even in a city known for its progressive politics, of trying to keep desirable communities affordable for the teachers, waiters, firefighters and store clerks who provide the bulk of services.

A group originally called Stop the Skyscrapers — now Housing for People — protests that a proposed city “housing element” needlessly clears the way for more apartments than state housing officials demand, while providing too few truly affordable units.

City officials say the plan they hope to finalize in the coming weeks, with its greater height limits, only creates a path for new construction. The intentions of individual property owners and the vicissitudes of the market will continue to make it challenging to build the 3,736 additional units the state has mandated for the city.

“We’ve talked to a lot of people, going door to door, and the feeling is it’s just too much, too fast,” said Frank Barron, a retired county planner and Housing for People co-founder. “The six- and seven-story buildings that they’re building now are already freaking people out. When they hear what [the city is] proposing now could go twice as high, they’re completely aghast.”

Frank Barron is among the activists who say the City Council’s development plans are out of character for the laid-back beach town.

(Brian van der Brug / Los Angeles Times)

Susan Monheit, a former state water official and another Housing for People co-founder, calls 12-story buildings “completely out of the human scale,” adding: “It’s out of scale with Santa Cruz’s branding.”

Housing for People has gathered enough signatures to put a measure on the March 2024 ballot that, if approved, would require a vote of the people for development anywhere in the city that would exceed the zoning restrictions codified in the current general plan, which include a cap of roughly seven or eight stories downtown.

The activists say that they are trying to restore the voices of everyday Santa Cruzans and that city leaders are giving in to out-of-town builders and “developer overreach laws.”

The nascent campaign has generated spirited debate. Opponents contend the slow-growth measure would slam on the brakes, just as the city is overcoming decades of construction inertia. They say Santa Cruz should be a proud outlier in a long string of wealthy coastal cities that have defied the state’s push to add housing and bring down exorbitant home prices and rental costs.

Diana Alfaro, who works for a Santa Cruz development company, said many of the complaints about high-rise construction sound like veiled NIMBYism.

“We always hear, ‘I support affordable housing, but just not next to me. Not here. Not there. Not really anywhere,’ ” said Alfaro, an activist with the national political group YIMBY [Yes In My Back Yard] Action. “Is that really being inclusive?”

Zav Hershfield, a renters’ rights activist, advocates rent control caps and housing developments owned by the state or cooperatives.

(Brian van der Brug / Los Angeles Times)

The dispute has divided Santa Cruz’s progressive political universe. What does it mean to be a “good liberal” on land-use issues in an era when UC Santa Cruz students commonly triple up in small rooms and Zillow reports a median rent of $3,425 that is higher than San Francisco’s?

Beginning in the 1970s, left-leaning students at the new UC campus helped power a slow-growth movement that limited construction across broad swaths of Santa Cruz County. Over the decades, the need for affordable housing was a recurring discussion. The county was a leader in requiring that builders who put up five units of housing or more set aside 15% of the units at below-market rates.

But Mayor Keeley said local officials gave only a “head nod” to the issue when it came to approving specific projects. “Well, here we are, 30 or 40 years later,” Keeley said, “and these communities are not affordable.”

Santa Cruz County, known for its windswept beauty and easy living, is in the midst of one of the most serious housing crises anywhere in California.

(Brian van der Brug / Los Angeles Times)

Today, with 265,000 residents, the county is substantially wealthy and white.

An annual survey this year found Santa Cruz County pushed past San Francisco to be the least affordable rental market in the country, given income levels in both places. And many observers say UC Santa Cruz students contend with the toughest housing market of any college town in the state.

Advertisement

State legislators have crafted dozens of laws in recent years to encourage construction of more homes, particularly apartments. While California has long required local governments to draft “housing elements” to demonstrate their commitment to affordable housing, state officials only recently passed other measures to actually push cities to put the plans into practice.

Regional government associations draw up a Regional Housing Needs Assessment, designating how many housing units — including affordable ones — should be built during an eight-year cycle. The state Department of Housing and Community Development can reject plans it deems inadequate.

For years 2024 to 2031, Santa Cruz was told it should build at least 3,736 units, on top of its existing 24,036.

For decades, Santa Cruz culture has centered on quaint shops and restaurants along sycamore-lined Pacific Avenue.

(Brian van der Brug / Los Angeles Times)

Santa Cruz and other cities have been motivated, at least in part, by a heavy “stick”: In cases when cities fail to produce adequate housing plans, the state’s so-called “builder’s remedy” essentially allows developers to propose building whatever they want, provided some of the housing is set aside for low- or middle-income families. In cities like Santa Monica and La Cañada-Flintridge, builders have invoked the builder’s remedy to push ahead with large housing projects, over the objections of city leaders.

The Santa Cruz City Council resolved to avoid losing control of planning decisions. A key part of their plan envisions putting up to 1,800 units in a sleepy downtown neighborhood of auto shops, stores and low-rise apartments south of Laurel Street. Initial concepts suggested one block could go as high as 175 feet (roughly 16 stories), but council members later proposed a 12-story height limit, substantially taller than the stately eight-story Palomar, which remains the city’s tallest building.

City planners say focusing growth in the downtown neighborhood makes sense, because bus lines converge there at a transit center and residents can walk to shops and services.

“The demand for housing is not going away,” said Lee Butler, the city’s director of planning and community development, “and this means we will have less development pressure in other areas of the city and county, where it is less sustainable to grow.”

Santa Cruz planning director Lee Butler advocates concentrating new development downtown, rather than building in areas where growth is less sustainable.

(Brian van der Brug / Los Angeles Times)

A public survey found support for a variety of other proposed improvements to make the downtown more attractive to walkers, bikers and tourists. Among other features, the plan would concentrate new restaurants and shops around the San Lorenzo River Walk; replace the fabric-topped 2,400-seat Kaiser Permanente Arena, which hosts the Santa Cruz Warriors (the G-league affiliate of the NBA’s Golden State Warriors), with a bigger entertainment and sports venue; and better connect downtown with the beach and boardwalk.

Business owners say they favor the housing plan for a couple of reasons: They hope new residents will bring new commerce, and they want some of the affordable apartments to go to their workers, who frequently commute well over an hour from places such as Gilroy and Salinas.

Restaurateur Zach Davis called the high cost of housing “the No. 1 factor” that led to the 2018 closure of Assembly, a popular farm-to-table restaurant he co-owned.

“How do we keep our community intact, if the people who make it all happen, the workers who make Santa Cruz what it is, can’t afford to live here anymore?” Davis asked.

One opponent calls the plan to add high-rises to the city’s picturesque downtown “out of scale with Santa Cruz’s branding.”

(Brian van der Brug / Los Angeles Times)

The city’s plan indicates that 859 of the units built over the next eight years will be for “very low income” families. But the term is relative, tied to a community’s median income, which in Santa Cruz is $132,800 for a family of four. Families bringing home between $58,000 and $82,000 would qualify as very low income. Tenants in that bracket would pay $1,800 a month for a three-bedroom apartment in one recently completed complex, built under the city’s requirement that 20% of units be rented for below-market rents.

The people pushing for high-rise development say expanding the housing supply will stem ever-rising rents. Opponents counter that the continued growth of UC Santa Cruz, which hopes to add 8,500 students by 2040, and a new surge of highly paid Silicon Valley “tech bros” looking to put down roots in beachy Santa Cruz would quickly gobble up whatever number of new units are built.

Advertisement

“They say that if you just build more housing, the prices will come down. Which is, of course, not true,” said Gary Patton, a former county supervisor and an original leader in the slow-growth movement. “So we’ll have lots more housing, with lots more traffic, less parking, more neighborhood impacts and more rich people moving into Santa Cruz.”

Leaders on Santa Cruz’s political left say new construction only touches one aspect of the housing crisis. Some of the leaders of Tenant Sanctuary, a renters’ rights group, would like to see Santa Cruz tamp down rents by creating complexes owned by the state or cooperatives and enacting a rent control law capping annual increases.

“No matter what they build, we need housing where the price is not tied to market swings and how much money can be squeezed out of a given area of land,” said Zav Hershfield, a board member for the group.

The up-zoning of downtown parcels has won the support of much of the city’s establishment, including the county Chamber of Commerce, whose chief executive said exorbitant housing prices are excluding blue-collar workers and even some well-paid professionals. “The question is, do you want a lively, vital, economically thriving community?” said Casey Beyer, CEO of the business group. “Or do you want to be a sleepy retirement community?”

The town clock is one of several landmarks in the beach town.

(Brian van der Brug / Los Angeles Times)

Just days after the anti-high-rise measure qualified for the March ballot, the two sides began bickering over what impact it would have.

Advertisement

Lane, the former mayor, and two affordable housing developers wrote an op-ed for the Lookout Santa Cruz news site that said the ballot measure is crafted so broadly it would apply to all “development projects.” They contend that could trigger the need for citywide votes for projects as modest as raising a fence from 6 feet to 7 feet, adding an ADU to a residential property or building a shelter for the homeless, if the projects exceed current practices in a given neighborhood.

The authors accused ballot measure proponents of faux environmentalism. “If we don’t go up,” they wrote, “we have less housing near jobs — and more people driving longer distances to get to work.”

The ballot measure proponents countered that their critics were misrepresenting facts. They said the measure would not necessitate voter approval for mundane improvements and would come into play in relatively few circumstances, for projects that require amendments to the city’s General Plan.

While not staking out a formal position on the ballot measure, the city’s planning staff has concluded the measure could force citizen votes for relatively modest construction projects.

The two sides also can’t agree on the impact of a second provision of the ballot measure. It would increase from 20% to 25% the percentage of “inclusionary” (below-market-rate) units that developers would have to include in complexes of 30 units or more.

The ballot measure writers say such an increase signals their intent to assure that as much new housing as possible goes to the less affluent. But their opponents say that when cities try to force developers to include too many sub-market apartments, the builders end up walking away.

Advertisement

Santa Cruz’s housing inventory shows that the city has the potential to add as many as 8,364 units in the next eight years, when factoring in proposals such as the downtown high-rises and UC Santa Cruz’s plan to add about 1,200 units of student housing. That’s more than double the number required by the state. But the Department of Housing and Community Development requires this sort of “buffer,” because the reality is that many properties zoned for denser housing won’t get developed during the eight-year cycle.

As with many aspects of the downtown up-zoning, the two sides are at odds over whether incorporating the potential for extra development amounts to judicious planning or developer-friendly overkill.

Joyful, left, and Valerie Christy, right, jam for fun and a few dollars in downtown Santa Cruz.

(Brian van der Brug / Los Angeles Times)

The city’s voters have rejected housing-related measures three times in recent years. In 2018, they decisively turned down a rent control proposal. Last year, they said no to taxing owners who leave homes in the community sitting empty. But they also rejected a measure that would have blocked a plan to relocate the city’s central library while also building 124 below-market-rate apartment units.

The last time locals got this worked up about their downtown may have been at the start of the new millennium, when the City Council considered cracking down on street performers. That prompted the owner of Bookshop Santa Cruz, another local landmark, to print T-shirts and bumper stickers entreating fellow residents to “Keep Santa Cruz Weird.”

Santa Cruzans once again are being asked to consider the look and feel of their downtown and whether its future should be left to the City Council, or voters themselves. The measure provokes myriad questions, including these: Can funky, earnest, compassionate Santa Cruz remain that way, even with high-rise apartments? And, with so little housing for students and working folks, has it already lost its charm?

Source: latimes.com

Apache is functioning normally

If you spent your teenage years waiting anxiously for one of your siblings to get out of the shower, the idea of selling your spacious, multi-bathroom home and moving into a smaller house or condo may feel like a reversal of fortune.

Yet for many retirees, downsizing makes financial and practical sense. Younger baby boomers — those currently ranging in age from 57 to 66 — made up 17% of recent home buyers, while older boomers — ages 67 to 75 — accounted for 12%, according to a 2022 report from the National Association of Realtors Research Group. Boomers’ primary reasons for buying a home were to be closer to friends and family, as well as a desire to move into a smaller home, the report said. Both younger and older boomers were more likely than others to purchase a home in a small town, and younger boomers were the most likely to buy in a rural area.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.

Profit and prosper with the best of expert advice – straight to your e-mail.

For retirees Fred and Shelby Bivins, selling their home in Green Valley, Ariz., will enable them to realize their dream of traveling in retirement. The Bivinses have put their 2,050-square-foot Arizona home on the market and plan to relocate to their 1,600-square-foot summer condo in Fish Creek, Wis., a small community about 50 miles from Green Bay. They plan to live in Wisconsin in the spring and summer and spend the winter months in a short-term rental in Arizona, where they have family.  

Fred, 65, says the decision to downsize was precipitated by a two-month stay in Portugal last year, one of several countries they hope to visit while they’re still healthy enough to travel. “We’ve had Australia and New Zealand on our list for many years, even when we were working,” says Shelby, 68. The Bivinses are also considering a return visit to Portugal. Eliminating the cost of maintaining their Arizona home will free up funds for those trips. 

With help from Chris Troseth, a certified financial planner based in Plano, Texas, the Bivinses plan to invest the proceeds from the sale of their home in a low-risk portfolio. Once they’re done traveling and are ready to settle down, they intend to use that money to buy a smaller home in Arizona. “Selling their primary home will generate significant funds that can be reinvested to support their lifestyle now and in the future,” Troseth says. “Downsizing for this couple will be a positive on all fronts.”

Challenges for downsizers 

For all of its appeal, downsizing in today’s market is more complicated than it was in the past. With 30-year fixed interest rates on mortgages recently approaching 8%, many younger homeowners who might otherwise upgrade to a larger home are unwilling to sell, particularly if it means giving up a mortgage with a fixed rate of 3% or less. More than 80% of consumers surveyed in September by housing finance giant Fannie Mae said they believe this is a bad time to buy a home and cited mortgage rates as the top reason for their pessimism. “This indicates to us that many homeowners are probably not eager to give up their ‘locked-in’ lower mortgage rates anytime soon,” Fannie Mae said in a statement. As a result, buyers are competing for limited stock of smaller homes, says Hannah Jones, senior economic research analyst for Realtor.com. 

Here, though, many retirees have an advantage, Jones says. Rising rates have priced many younger buyers out of the market and made it more difficult for others to obtain approval for a loan. That’s not an issue for retirees who can use proceeds from the sale of their primary home to make an all-cash offer, which is often more attractive to sellers. 

Retirees also have the ability to cast a wider net than younger buyers, whose choice of homes is often dictated by their jobs or a desire to live in a well-rated school district. While the U.S. median home price has soared more than 40% since the beginning of the pandemic, prices have risen more slowly in parts of the Northeast and Midwest, Jones says. “We have seen the popularity of Midwest markets grow over the last few months because out of all of the regions, the Midwest tends to be the most affordable,” she says. “You can still find affordable homes in areas that offer a lot of amenities.” 

Meanwhile, selling your home may be somewhat more challenging than it was during the height of the pandemic, when potential buyers made offers on homes that weren’t even on the market. The Mortgage Bankers Association reported in October that mortgage purchase applications slowed to the lowest level since 1995, as the rapid rise in mortgage rates has pushed many potential buyers out of the market. Sales of previously owned single-family homes fell a seasonably adjusted 2% in September from August and were down 15.4% from a year earlier, according to the National Association of Realtors. “As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales,” NAR chief economist Lawrence Yun said in a statement. 

However, because of tight inventories, there’s still demand for homes of all sizes, Jones says, so if your home is well maintained and move-in ready, you shouldn’t have difficulty selling it. “The market isn’t as red-hot as it was during the pandemic, but there’s still a lot to be gained by selling now,” she says.

Other costs and considerations 

If you live in an area where real estate values have soared, moving to a less expensive part of the country may seem like a logical way to lower your costs in retirement. While the median home price in the U.S. was $394,300 in September, there’s wide variation in individual markets, from $1.5 million in Santa Clara, Calif., to $237,000 in Davenport, Iowa. But before you up and move to a lower-cost locale, make sure you take inventory of your short- and long-term expenses, which could be higher than you expect. 

Selling your current home, even at a significant profit, means you will incur costs, including those to update, repair and stage it, as well as a real estate agent’s commission (typically 5% to 6% of the sale price). In addition, ongoing costs for your new home will include homeowners insurance, property taxes, state and local taxes, and homeowners association or condo fees.

Nicholas Bunio, a certified financial planner in Berwyn, Pa., says one of his retired clients moved to Florida and purchased a home that was $100,000 less expensive than her home in New Jersey. Florida is also one of nine states without income tax, which makes it attractive to retirees looking to relocate. Once Bunio’s client got there, however, she discovered that she needed to spend $50,000 to install hurricane-proof windows. Worse, the only home-owners insurance she could find was through Citizens Property Insurance, the state-sponsored insurer of last resort, and she’ll pay about $8,000 a year for coverage. Her property taxes were higher than she expected, too. When it comes to lowering your cost of living after you downsize, “it’s not as simple as buying a cheaper house,” Bunio says 

Before moving across the country, or even across the state, you should also research the availability of medical care. “Oftentimes, those considerations are secondary to things like proximity to family or leisure activities,” says John McGlothlin, a CFP in Austin, Texas. McGlothlin says one of his clients moved to a less expensive rural area that’s nowhere near a sizable medical facility. Although that’s not a problem now, he says, it could become a problem when they’re older. 

If you use original Medicare, you won’t lose coverage if you move to another state. But if you’re enrolled in Medicare Advantage, which is offered by private insurers as an alternative to original Medicare, you may have to switch plans to avoid losing coverage. To research the availability of doctors, hospitals and nursing homes in a particular zip code, go to www.medicare.gov/care-compare.

At a time when many seniors suffer from loneliness and isolation, a sense of community matters, too. Bunio recounts the experience of a client who considered moving from Philadelphia to Phoenix after her daughter accepted a job there. The cost of living in Phoenix is lower, but the client changed her mind after visiting her daughter for a few months. “She has no friends in Phoenix,” he says. “She’s going on 61 and doesn’t want to restart life and make brand-new connections all over again.”

Time is on your side 

Unlike younger home buyers, who may be under pressure to buy a place before starting a new job or enrolling their kids in school, downsizers usually have plenty of time to consider their options and research potential downsizing destinations. Once you’ve settled on a community, consider renting for a few months to get a feel for the area and a better idea of how much it will cost to live there. Bunio says some of his clients who are behind on saving for retirement or have high health care costs have sold their homes, invested the proceeds and become permanent renters. This strategy frees them from property taxes, homeowners insurance, homeowners association fees and other expenses associated with homeownership 

The boom in housing values has boosted rental costs, as the shortage of affordable housing increased demand for rental properties. But thanks to the construction of new rental properties in several markets, the market has softened in recent months, according to Zumper, an online marketplace for renters and landlords. A Zumper survey conducted in October found that the median rent for a one-bedroom apartment fell 0.4% from September, the most significant monthly decline this year. 

In 75 of the 100 cities Zumper surveyed, the median rent for a one-bedroom apartment was flat or down from the previous month. (For more on the advantages of renting in retirement, see “8 Great Places to Retire—for Renters,” Aug.)

Aging in place

Even if you opt to age in place, you can tap your home equity by taking out a home equity line of credit, a home equity loan or a reverse mortgage. At a time when interest rates on home equity lines of credit and loans average around 9%, a reverse mortgage may be a more appealing option for retirees. With a reverse mortgage, you can convert your home equity into a lump sum, monthly payments or a line of credit. You don’t have to make principal or interest payments on the loan for as long as you remain in the home. 

To be eligible for a government-insured home equity conversion mortgage (HECM), you must be at least 62 years old and have at least 50% equity in your home, and the home must be your primary residence. The maximum payout for which you’ll qualify depends on your age (the older you are, the more you’ll be eligible to borrow), interest rates and the appraised value of your home. In 2024, the maximum you could borrow was $1,149,825.

There’s no restriction on how homeowners must spend funds from a reverse mortgage, so you can use the money for a variety of purposes, including making your home more accessible, generating additional retirement income or paying for long-term care. You can estimate the value of a reverse mortgage on your home at www.reversemortgage.org/about/reverse-mortgage-calculator.

Up-front costs for a reverse mortgage are high, including up to $6,000 in fees to the lender, 2% of the mortgage amount for mortgage insurance, and other fees. You can roll these costs into the loan, but that will reduce your proceeds. For that reason, if you’re considering a move within the next five years, it’s usually not a good idea to take out a reverse mortgage.

Another drawback: When interest rates rise, the amount of money available from a reverse mortgage declines. Unless you need the money now, it may make sense to postpone taking out a reverse mortgage until the Federal Reserve cuts short-term interest rates, which is unlikely to happen until late 2024 (unless the economy falls into recession before that). Even if interest rates decline, they aren’t expected to return to the rock-bottom levels seen over the past 15 years, according to a forecast by The Kiplinger Letter. And with inflation still a concern, big rate cuts such as those seen in response to recessions and financial crises over the past two decades are unlikely. 

Note: This item first appeared in Kiplinger’s Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

Related Content

Source: kiplinger.com

Apache is functioning normally

Set against the scenic backdrop of the Rocky Mountains, Denver is the best of both worlds for people looking for a big-city environment close to the great outdoors. In town, there’s amazing dining, arts, culture and sports like Colorado Rockies baseball. Just outside of town, you can go hiking, skiing, climbing and much more. It’s easy to see why it’s one of the best places to live in Colorado.

On top of all this, Denver also has an affordable cost of living that’s only 11 percent higher than the national average. This is down 1.4 percent from last year. Most cost of living categories here are actually below the national average. Combine affordable prices with the abundance of things to do and you have a great quality of life that appeals to everyone from families and young professionals. But there are some costly aspects of living in the Mile High City that you should know before uprooting your life to move out west. Here’s how the cost of living breaks down in Denver.

Denver housing prices

The cost of housing is Denver’s highest cost of living expense, rising 40.5 percent above the national average. Even though housing costs here have been going up over the past decade, the current rate is only 2 percent higher than last year.

From downtown to Five Points, Denver has tons of cool neighborhoods for renters. If you’re looking to rent an apartment here, the average monthly rent for a one-bedroom apartment is $2,077. This is 2 percent lower than last year. If you want to size up to a two-bedroom unit, it will set you back around $2,774 a month.

If you’re interested in buying a house in Denver, expect a competitive market. With city parks, good schools and easy access to the city center, Denver has many family-friendly districts and areas that are perfect for homeowners. The median sale price for a house here is $581,000, which is 8.6 percent higher than last year. This is much higher than the national median sale price for a house, which is $403,556.

Denver is by far Colorado’s most populous city. If you’re looking for affordable housing, it’s definitely one of the more expensive options. In Colorado Springs, Colorado’s second-biggest city, the average one-bedroom rent is $1,280. But there are also plenty of smaller cities in the Rocky Mountains that give Denver a run for its money cost-wise. Renting a one-bedroom apartment in the popular outdoorsy town of Boulder is $2,082 a month.

Denver food prices

From mountain climbing to hiking, Denver calls to people who love adventure. That extends to its food scene as well. The Mile High City boasts a diverse and exciting food scene including craft breweries, Mexican cuisine featuring locally-grown green chiles, Rocky Mountain oysters and much more. So if you’re looking for a dynamic and delicious foodie city, Denver could be right up your alley.

Whether you love dining out or dining in, the good news is that the food costs here are pretty affordable. The price of food is 6.6 percent lower than the national average, which is 0.3 percent less than last year. Going to the grocery store, a dozen eggs costs around $2.01, a half-gallon of milk is $1.97 and a loaf of bread is $3.63.

Some food prices here are slightly higher than elsewhere in the state. In Colorado Springs, that dozen eggs costs slightly less at $1.98. But some items are cheaper here, as you’d be paying $2.71 for a half-gallon of milk in Pueblo.

Denver utility prices

Due to its location in the Colorado high desert close to the Rockies, lots of people expect Denver to have hot, dry summers and frigid, snowy winters. But that’s actually not the case. Summers don’t get unbearably hot, with sunny and dry days. Winters can be cold but don’t get as much snow and bad weather as the nearby mountains.

As such, utility costs here aren’t as bad as could be expected due to this reasonable climate. Dropping 1.1 percent from last year, the cost of utilities here is 17.9 percent below the national average. Denver residents can expect to pay around $121.81 for energy each month.

This is actually on the low side of Colorado energy prices. In Colorado Springs, average monthly energy costs are around $195.42. Living in Pueblo, you’d be paying an average of $175.94 a month in total energy costs.

Denver transportation prices

Of all the good things you’ve heard about Denver, traffic and transportation probably aren’t on that list. Due to the rapidly-expanding population, local infrastructure hasn’t been able to keep up with the growth. This has led to notorious gridlock and bad traffic. In fact, it’s one of the worst cities for traffic in America.

Luckily, Denver also has a robust public transportation system, as well as affordable overall transportation costs. The cost of transportation here is 1.3 percent below the national average, which is 8.2 percent lower than last year.

If you do want to use public transportation here, you can use the Regional Transportation District, or RTD, mass transit system. This agency offers bus, rail and light rail transportation options throughout the city. Fares vary depending on the zone and type of transit. The fare for a single bus trip is $3, with a three-hour travel window. With a $6 day pass, riders have unlimited access to local buses and rail services. Local areas around central Denver are lower, with rates going up for regional travel throughout the metro area. A monthly local pass is $114, while a monthly regional pass is $200.

If you do prefer to drive to get around town, you should be aware of the toll road E-470 which heads out to the airport. However, this route heads along the eastern edge of the city and isn’t one of the main arteries for commuters. Unless you head to the airport a lot, you likely won’t need to use it much. You can also pay $35 for an ExpressToll account to use tolled express lanes around the city to get through the most heavily-trafficked areas.

Focus on the cost of a one-way trip (make sure you mention zone pricing if relevant) as well as weekly or monthly fare prices. Also be sure to take into consideration if trains have different rates than subways vs. buses, etc.

Denver is also a fairly walk- and bike-friendly city. With a walk score of 71 and a bike score of 78, it’s pretty easy to navigate the city center on foot or with your bike.

Denver healthcare prices

Colorado is one of the best states in America for healthcare quality and public health. With many top-ranked hospitals in and around the Denver area, locals have plenty of access to exceptional, top-notch medical care.

Along with the quality of care, affordable healthcare costs are another bonus of living here. Down 1 percent from last year, healthcare costs in Denver are 0.5 percent below the national average. Going to the doctor’s office costs roughly $105, and heading to the dentist will set you back around $116. The cost of prescription drugs is on the high side at $488.95.

Even though most of these healthcare costs are reasonable, it’s important to note that these rates won’t be the same for everyone. Healthcare costs vary depending on personal needs, making it difficult to come up with an accurate average. Some Denver locals may pay much higher for healthcare than others depending on insurance, necessary treatments and other health needs.

Healthcare costs here are pretty middle-of-the-road compared to the rest of Colorado. Going to the doctor’s office in Colorado Springs costs $137.50, but is only $95 in Pueblo.

Denver goods and services prices

Along with monthly expenses like housing, groceries and utilities, goods and services is another cost of living expense to consider. These are items or services to purchase or use on a semi-regular basis, like getting a haircut or going to the movies.

Denver has an active social scene, giving residents lots of opportunities for entertainment out on the town. Fortunately, the overall cost of goods and services is reasonable, being only 5.4 percent higher than the national average. This is 4 percent lower than the previous year.

As an example of what those figures mean, getting your hair cut in Denver costs an average of $24.75. This is cheaper than other cities like Colorado Springs, where it costs $26.43. Some costs here are more expensive, like movie tickets. Going to a movie in Denver costs around $14.23 for tickets compared to $11 in Pueblo.

Taxes in Denver

Living in Denver, the city sales tax is 4.81 percent. But that figure goes up to 8.81 percent when you also add Colorado state sales tax and several small taxes for the scientific and cultural fund and transportation.

If you’re spending $1,000 on ski gear getting ready for winter, you’ll be paying $88.1 extra in sales tax.

Denver and Colorado also levy a minimum marijuana sales tax of 15 percent. So if you enjoy partaking, that’s another tax to consider.

How much do I need to earn to live in Denver?

Now that you’ve seen what things like housing and food cost around Denver, the question remains of how much you have to make to comfortably live here.

A good rule of thumb is to only spend 30 percent of your monthly income on rent. This is because rent is typically your biggest monthly expense. Considering that the average rent in Denver is $2,135, you’d need to make $7,116 a month for that to be 30 percent of your monthly income. That comes out to $85,392 annually.

You can use our rent calculator to figure out what you can afford to pay in rent depending on income, location and other factors.

Living in Denver

Especially given its size and popularity, for the most part, Denver boasts a reasonable cost of living. Housing is the biggest exception, whereas other monthly expenses like food or utilities are on the affordable side. So if you can swing higher rents or mortgages, you may find living in Colorado’s capital city to be within your budget. Plus, you get amazing outdoor access, stunning mountain views and tons of big-city fun from sports and dining.

The Cost of Living Index comes from coli.org.
The rent information included in this summary is based on a calculation of multifamily rental property inventory on Rent. as of November 2022.
Rent prices are for illustrative purposes only. This information does not constitute a pricing guarantee or financial advice related to the rental market.

Source: rent.com