Buying A House In Colorado: Where, When, Why And How
Katie Ziraldo5-Minute Read
April 22, 2021
With stunning landscapes, mounting tourist attractions and an ever-growing economy, it’s no surprise to see Americans flocking toward Colorado. In fact, U.S. News ranked Boulder and Denver the top two best cities to live in the U.S. in 2020 and 2021 – with Colorado holding an impressive four out of the five top spots on the list.
If you’re a Colorado resident, buying a house should be a standard process. But if you’re thinking about an interstate move, there may be more to consider. In this article, we will explore the advantages of owning a home in the Centennial State and what you should consider before taking the leap!
Why Buy A House In Colorado?
Aside from all the state has to offer, Colorado real estate can also be a solid investment. As of 2020, Colorado was ranked as the third best state for low property taxes, the eighth best state for high traditional rental income and the eighth best state for high Airbnb rental income.
The overall economy and real estate market in the state have grown steadily in recent years, making Colorado a buyer’s market. With home values on the rise, you would be hard pressed to find a better time to purchase property. And with an investment property specifically, you have a good chance to make a profit by renting or reselling the home.
Top 5 Real Estate Cities In Colorado
If you’ve decided to buy property in Colorado, the next step is to choose your city. Of course, this may be dictated based on your school, career or other non-negotiable factors. But if you’re able to work remotely, open to starting a new career or simply purchasing an investment property, these cities could be a good place to start.
The following is a list from Rocket Homes® of the top five real estate cities in Colorado. They were chosen based on their unique attractions, real estate trends and overall popularity.
Described as “the city nestled between mountains and reality,” this creative community is only 30 minutes away from the big city of Denver but offers its own unique appeal. With numerous hike and bike trails, top-rated restaurants and a large shopping center, there’s no shortage of things to do in Boulder.
- Population: 107,360
- Median household income: $66,117
- Median list price: $788,317
- Boulder real estate listings
- Boulder trend report
Also known as the Mile High City, Denver seamlessly blends city living with outdoor adventure. A short distance from the Rocky Mountains – and the ski slopes that occupy them – this city is known for its world-class cultural attractions, major museums and a growing music scene. And as a bonus, the conveniently located Denver International Airport (DEN) makes this an easy destination for travelers.
- Population: 716,492
- Median household income: $68,377
- Median list price: $499,381
- Denver real estate listings
- Denver trend report
Founded as a resort town by a Civil War hero in 1871, Colorado Springs is a historian’s dream. It’s the second-largest city in the state, boasting over 55 area attractions, including one of America’s most famous landmarks, Pikes Peak, which inspired Katharine Lee Bates to write the lyrics to “America The Beautiful.” Other attractions include museums, scenic parks and trails, and a zoo.
- Population: 472,666
- Median household income: $65,331
- Median list price: $388,608
- Colorado Springs real estate listings
- Colorado Springs trend report
Located north of Denver, Fort Collins is the pinnacle college town, home to Colorado State University and northern Colorado’s Rocky Mountain National Park. Despite its close proximity to the state’s city hub, Fort Collins is a destination in and of itself, offering striking scenic views, dynamic nightlife and a reputation as one of the Centennial State’s top craft-brewery hubs.
- Population: 162,511
- Median household income: $62,132
- Median list price: $338,100
- Fort Collins real estate listings
- Fort Collins trend report
Just east of Denver, Aurora originally developed as a military town, as proven through its historic and repurposed airfields, most recently used for the creation of Stanley Marketplace, a food-centric community market. Home to state parks, golf courses, and a rising art scene, Aurora has plenty to see and do, but is also conveniently nearby the attractions of Denver.
What Do I Need To Buy A Colorado Home?
The requirements for buying a house in Colorado are standard, but always important to consider before trying to buy property. When applying for financing, the lender will look for the following:
- Good credit: Most mortgage types require a credit score of 620 or higher for approval.
- Low debt-to-income (DTI) ratio: This is your monthly income divided by your minimum debt payments. Lenders look at this to ensure you will realistically be able to make payments on your mortgage if approved.
- Financial documentation: Your lender will review various documents, including proof of income, tax returns, bank statements, and more – so it’s a good idea to have these documents prepped and ready to ensure a smooth process.
- Home appraisal: This will determine the home’s value, which is an important part of the closing process as it confirms the amount the lender is willing to give you.
- Down payment: The lump sum of money you pay at closing will affect your ability to get approved as well as your loan interest rates.
When To Buy A House In Colorado
Market trends and predictions can be a great way to strategize your home buying timeline. For example, the housing market in Colorado is directly impacted by the weather, with far less homes available for purchase in November when compared to June. Although this doesn’t make it impossible to buy a house in the winter, it does mean you will have fewer homes on the market to choose from – so you may be better off targeting the warmer months.
Things To Know About Buying A House In Colorado
When buying a house out of state, there are some unique factors to keep in mind, like what to consider when you’re making an offer on a house without seeing it. Although you may think you have a clear picture of the home you’re buying from the pictures in the listing, this is rarely the case. This means if you can’t visit the home yourself, it’s important to send a trusted representative – ideally your real estate agent – to look at it for you.
Other unique considerations for buying a house in Colorado include:
- Colorado Housing and Finance Authority (CHFA) loans: These loans are offered specifically for Colorado real estate and may be an alternate form of financing you can consider.
- State-regulated offer letters: Known most commonly as lender letters, Colorado requires home buyers to receive a letter from their lender confirming their pre-approval for funding up to a certain amount. This letter is provided to the seller at the time of the offer and serves as evidence that you have the money needed to buy the home.
The Bottom Line On Buying A House In Colorado
Making an interstate move is no easy feat. The process can be overwhelming and stressful, but with the right planning, strategy and timeline, you can make your dream of owning a second home or investment property become a reality. And with a growing economy and unique cultural attractions, Colorado could be the perfect state to consider.
As always, the best way to ensure a smooth home buying process is to work with a professional, so we recommend connecting with a Rocket Homes Verified Partner Agent.
All population and income data pulled from Data USA in April 2021.
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