Affordable Fixer Uppers Fail to Meet Demand- By: John Cutts
A considerable number of cheap foreclosed homes, including fixer uppers, are available in Colorado. However, not a lot of families are willing or have the means to purchase them, with majority of state residents preferring to rent homes instead of buy them. Renting homes though, has also become a challenge for most of the state's residents.
Despite the conversion of a number of foreclosed commercial properties in Denver and multifamily dwellings in the rest of the state into rental properties, demand still outpaces supply. The main problem, real estate experts have stated, is not the unit supply per se, but the supply of rental homes that state residents can afford.
The oversupply of Colorado foreclosures and the prevailing unemployment have contributed to bringing household income down in most areas of the state. In Jefferson County, for example, around 18,000 residents are said to be earning less than $20,000, which makes it hard for them to pay their rental fees and still have enough money to spend on food and other daily necessities.
For people who have earnings of $20,000, the ideal monthly rent should be $480, according to government guidelines. The problem is, there are not enough rental homes in Jefferson that are available for that amount. Even the low-priced fixer uppers that have been converted into rental housing charge higher than that, housing industry observers have reported.
According to national data, households in the U.S. that spend more than 50% of their income on rent has increased by 20% in the past few years. Majority of renters are unable to pay rent, much less purchase low-priced foreclosure houses. This created a shortage of homes that low-income families can afford to rent or buy. In Colorado, the problem is even more evident, particularly in areas like Jefferson, Adams, and Arapahoe County.
In Jefferson, local officials have estimated that supply of affordable rental homes is short by more than 13,000. Meanwhile, Arapahoe County requires around 12,500 units, and Adams needs around 3,500 units to cover low-earning residents' needs for affordable homes. Even with some foreclosed houses as well as fixer uppers being converted into rental premises, the state is still facing a considerable shortage of affordable dwellings.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.