What?! People are Leaving Denver??

More Coloradans moving out as population growth brings traffic headaches, higher home prices.

This is the headline in the Denver Post this week.  

People have been moving West since Lewis and Clark in 1804, actually, since way before Lewis and Clark.  How about since 1607.  Manifest Destiny.

Denver has always enjoyed a very healthy amount of transplants not just from the East Coast, but also from California, Texas, etc.  This has been especially on the upswing post-recession, as Denver has been an absolute boom town, with cranes everywhere, building new commercial buildings, apartments everywhere to the tune of 10,000 units a year, and by some estimates as many as 1,000 people a week moving to the city of Denver.  

This explosion in growth has come with some tradeoffs as anyone who’s been here more than a year or two can surely notice.  

The elephant in the room here is affordability.  Rental housing and For Sale housing has increased exponentially over the past 7 years, again to the tune of 10% a year, all the while wages are flat or stagnant.  This a recipe for disaster, or at least a recipe for a tipping point.

Have we reached a tipping point?

Perhaps.  Anytime the cost of living in an area relative to the wages available gets so far out of whack that it starts to squeeze out opportunity.

I feel the opportunity factor here in Denver has taken a huge hit over the past say 3-4 years.  There is just not as much opportunity for younger people.  The unemployment is low but there seems to be just a plethora of low and mediocre paying jobs available.  Denver is absolutely a service-oriented city.  There are not many corporate headquarters here.  Add in giant college debt loads and paying 40% or 50% of your take home money to rent just doesn’t seem cool.  Nowadays, even places like Omaha, Nebraska have all sorts of craft coffee shops, farmer’s markets, brew pubs, etc. with a cost of living that is a fraction of what it is here.  

If things continue on their current trajectory I could totally see a net out-migration, at least until housing costs become more affordable or wages increase.  It’s just out of whack right now.  

A similar problem is occurring and is well-documented in the Bay Area.  

Quality of Life/ Traffic

I personally think the traffic issue is overblown.  People who are leaving cite traffic as a major actor.  I’m still of the opinion that Denver’s traffic, for a major city, is actually not very bad at all.  Major urban areas have bad traffic; that’s a fact.  Unless your commute is up and down I-25 to the tech center from the Northern Metro, and that’s admittedly a bad commute, but it begs the question why are you doing that voluntarily?

With that being said, I do think the quality of life potentially could be taking a hit, as the drag on city resources grows bigger, and the city needs to step up and reinvest in proper infrastructure, and I’m not talking about adding lanes to the interstate.  We NEED meaningful intra-city transit.  Denver’s mass-transit is lacking in real-world applicability.  We have suburban light rail and the airport train, but they just don’t serve city residents that well.  Start with better bus service and go from there.  We’ll have more on this topic in a future post.

Out-Migration

In conclusion, out-migration could have a big impact on housing in particular moving forward.  So many apartments have been built on the premise that we will get a never-ending supply of new residents who will pay for luxury apartments.  We are starting to see the first cracks in the dam of that notion.  

So many newcomers to Colorado are young, don’t have extended family here, haven’t established their own families, and I fear could leave as quickly as they came.  

Denver was once a great value of a city, great weather, mountains, skiing, easy to get around, cheap real estate in beautiful neighborhoods, affordable dining, etc, etc,  some of those qualities may be changing for better or worse.  For some people its still a great value, for others, not so much.

What do you think?  Is this a non-story or is there something here?  Are we reaching  tipping point?  

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About Jeff Summerhill

Jeff is equally passionate about the x's and o's of real estate, and the emotional, more heart-felt side of real estate like people, places, and design. He enjoys getting up to the mountains and skiing, hiking, and biking whenever time permits.

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  1. Evan says

    As someone who grew up in Denver, I can understand why many would now choose to leave. For many years, our housing costs were affordable and the sprawl that has taken hold in the last decade has become too much for a lot of people. We had previously seen some very low home prices traditionally. My parents bought their 4 bedroom, 3 level home, in 1989 for $75k. We saw some increases in prices during the early 2000’s era, but even $200-$250 for an average Denver area home during that time was not too out of reach for most residents and we saw a sales boom of sorts before the 2007-09 timeframe. Around 2008, prices had reverted back to 1980’s levels and you could once again, seek out homes for less than $100k. Also during that time, the city itself had not been altered and overbuilt like it is now to the point where you really can’t see the mountains now. Big areas of Northeastern Denver and Aurora, for example were almost like “country living in the city” but those days are gone and it seems to be endless sprawl, everything is being filled in rapidly, and its frankly just become ugly and overpopulated. I can literally see the increase in poverty in places like North Aurora on the Colfax Ave corridor. Colfax has never been the cream of the crop as far as poverty has ben concerned, but one who pays attention could hardly think that 2008 was worse than now. $1,000 a month in rent used t0 get you a pretty nice apartment in the metro area, or even a decent rental home. Now that gets you a studio or one bedroom, usually in a formerly desirable, run down part of town. The housing costs have become to ridiculous, especially for those of us who have grown up here. Investors have also ruined a lot of the original charm of many neighborhoods with their remodeling for the sake of profit. I love where I grew up, but I never have thought that a house near the Aurora Mall is worth over $400k, a home in Montbello over $400k, or crap apartments on 6th and Havana going for well over $1,300 A month. only in the last five-six years have we seen this type of overinflation here and I think that it has a lot to do with the increased numbers of homeless on our streets. Prior to the Weed legalization, Denver had been pretty affordable. A lot of folks that I grew up with here, had parents that had already long ago paid their homes off because they were so affordable, but now most of them have left, selling out because of the huge equity increases, and so we are also left with neighborhoods that rapidly went through these changes and there aren’t hardly any original reisdents there anymore. As someone who grew up here it’s pretty sad to see. In my old neighborhood, many had been there for years, which helped to contribute to a sense of real community. Those days are gone. I still have love for Denver but, even I ended up relocating south of the city to the Springs. I like it a lot. feels like the “Old” Colorado many of us knew and loved.

  2. A says

    After 4 years of calling Denver home I left for a multitude of reasons. Housing costs. Too high and for a landlocked, brown, treeless plain. Wages are not up to jar with housing costs. I’m making more in South Florida and without state income tax. Cookie cutter homes and apartments. Boring and zero character. They all look the same.

    People are kooks. Artificially nice on the outside, but no one can make a plan to do something without it evolving around their mountain schedule. Can’t tell you how many times people bailed out on plans at the last minute.

    Traffic is nothing there. Compared to my hometown of Chicago and now Miami where I live it’s gravy. People love to complain about it. It’s a joke there. Denver wants to be a big city but it’s not. Unless you plan to be in the mountains every weekend, you will see the same faces every weekend all the time. Seriously. The city is small.

    Drug culture is bad there. Everyone is on substance it into heavy drinking. Denver is one if not the top binge drinking city in America. It’s also no secret it’s second (Colorado) in suicide rates next to Wyoming. Everyone is either on drugs or a alcoholic.

    Nice weather and scenery yes. Enough to make me stay nope. Of you plan to move there good luck and Prepare to shell out half your income on housing and sky high auto insurance. Lots of hail means lots of claims every year. Have a very low comprehension deductible. Also, I swear, it’s the car crash Capitol. Every few miles you will see a car crash nonstop day and night. Drug and alcohol abuse equals car crashes. You’ll see. Trust me.

    • NCognito says

      on point. Feel same. Getting ready to leave and am sad/glad at same time. Loved the old Colorado where a good mix of incomes and people made the place interesting. Now, it’s cut-throat ugly, competitive, and a lot of fluff, but no substance. Denver is fast becoming Aspen-like (where the billionaires are pushing out the millionaires)…soon needed people such as nurses, custodians, and support staff will have to move elsewhere to avoid constant financial stress brought on by a city bloated with self-importance with corresponding low wages to afford a roof, food, etc. Meaninful relationship are definitely not associated with Denver and its inhabitants playing a one upsmanship game with homes, status, credentials, etc. Sick of it, sick of them. Love the mountains, WHEN YOU CAN GET TO THEM.

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