Affordable Penny Lane home unsold

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The deed-restricted affordable home at 2381 Penny Lane in West End Village offers three bedrooms, two baths and a garage and is listed for $329,000, a relatively low price for the Steamboat market. However, the home has been slow to sell.

— The house at 2381 Penny Lane in West End Village is listed for sale well below the prevailing "price of admission" for single-family homes within the city limits of Steamboat Springs. Yet, it's been waiting for months to sell.

What gives? The owner of the house in West End Village needs to find a prospective buyer who makes no more than about $87,000 and whose net worth is less than $270,000 to meet the affordable housing deed restrictions placed on the home.

The three-bedroom, two-bath modular includes an over-sized, stick-built two-car garage. It is listed by Realtor Colleen de Jong at $329,00. The home was originally listed for $347,000 by another Realtor. The price reduction has resulted in increased traffic, de Jong said, but so far, no buyers.

De Jong, said she uses an "attainability" chart prepared by the Routt County Planning staff to understand how they can qualify for and afford the home. A family of four at 120 percent of the annual median income for Routt County would be able to purchase the home either with 90 percent or 100 percent financing.

"I think the interesting thing is that he's having a hard time selling it," de Jong said. "People expect, in this environment, to get appreciation. I think some people don't understand the deed restrictions."

Her client has owned the home for just 12 months, de Jong said, and, at that price, he will pay his Realtor fees and break even. Owners who plan to live in their homes for 7 to 10 years have a better chance to see their investment grow, she said.

So why hasn't it been snapped up?

The Realtor thinks some prospective buyers are deterred by the deed restrictions meant to ensure affordability.

"It's definitely a cute house, and it will work for somebody," she said. "There is equity built in. And you can get other benefits, like a county tax write-off."

The home has wood and vinyl siding, all appliances, a satellite dish and receiver, natural gas forced-air heat, a gas log fireplace in the living room and a wood fence. There is a covered porch at the front entrance to the home.

The deed restriction in West End Village required that the owners must be year-round residents of Routt County who are working here. Retired people are eligible under certain circumstances.

The owners must use the deed-restricted homes as their primary residence - buyers would qualify if they vote here or their driver's license is registered here, for example.

De Jong came close to selling her client's home this fall, but the buyers opted instead for a nearby West End Village home on Savoy Place that was priced at $299,900. It offered some upside in its unfinished basement, she said.

De Jong said her client would have been in a better position to realize appreciation on his home investment if he had been able to live in it longer, but his life changed, dictating a change. She continues to think that deed-restricted affordable homes will fill an important niche in the marketplace in the future.

"There's a little bit of 'pay it forward' involved," she said. "I think eventually the system will work when our (housing) prices go higher."

De Yong can be reached at 879-8100, ext. 437, or 846-5569.

Comments

JustAsking 7 years, 5 months ago

Will somebody please explain how this affordable housing program is supposed to work. I confess that I just don't get it. It's absolutely no surprise to me that his house hasn't sold when you take a look at basic numbers.

The agent makes reference to a 90 or 100% loan. Exclusive of closing costs, taxes, insurance, and the miscellaneous expenses of moving, the basic 30 year mortgage is going to be almost $2,200 per month!

A person making the maximum income of $87,000 per year would take home a maximum about $5,800 of per month. Assume a very modest $600 per month for utilities, taxes, upkeep, and repairs and that leaves $3,000 per month for everything else. This is a pretty high expense to income ratio right from the start. Keep in mind this person is at the top end of the earning limit. (Some one with less income would be foolish to dedicate an even higher percentage of income to housing alone) I submit that if this person looks at the restrictions attached to the property in the event of resale he will immediately see that this "affordable" restricted property is a terrible choice.

Why? Limited appreciation and very limited buyers who qualify. At the end of 2010 he will still owe $313,000 on the $329,000 borrowed (7%). Selling at that point even for the amount initially paid would result in real estate commissions of about $20,000. Where is the upside for this buyer?

It seems to me he would be much better off buying in the general market with out the arbitrary restrictions even if it means smaller or a short way from town.

I asked the following in another response to a letter to the editor and never received any information or feedback. I'll pose the questions again:

"Just what is "affordable housing"? Who gets to live in it? What are their obligations? Where are there units in the city? Are they being utilized? If 14 units at One Steamboat were built; who could purchase them, for how much? "

On the surface is might appear that 'affordable housing' is a great humanitarian ideal but if you look at the real situation I can't help but wonder if it isn't just another government mandated boondoggle.

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Gladys 7 years, 5 months ago

Affordable at $329,000...and for a glorified "trailer" in West End? You have GOT to be kidding. No one with an annual income of $87,000 can afford a $329,000 house - that is absolutely ridiculous.

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seabirth 7 years, 5 months ago

funniest story i've read in awhile. the newspaper running real estate ads (i mean stories) about so-called affordable housing.

seems like the only one that's got a chance of making any money is the realtor.

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snowysteamboat 7 years, 5 months ago

Would Townie Anderson or Steve Lewis like to weigh in here?

This is classic case of why this DOES NOT WORK!

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dave reynolds 7 years, 5 months ago

unless you bought your house 15 to 20 years ago when they were actually semi affordable the working stiff(plow divers,sanation people,store employees,..you get my drift) stands as bout as much of a chance of buying an "affordable home" as you do keeping a popsicle frozen in the desert..I always thought this was a joke..as people on the commitee and council have no clue..feel bad for couples just starting out..heck even Whistler units are in the 240,000 price range tack on assoc. dues utililies etdc. and thats barely affordable I actually heard somsone in line at City Market say they thought that poor people should not be allowed to live in Steamboat..how out ragous you can imagine the reactions of other people in line..this woman obviously didn't get her money through her brain either married it, inherted it or won it..shes probably on the affordable housing commiteee or city council

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dogd 7 years, 5 months ago

Townie:

One idea LEFT untried: the affordable deed-restricted realtor commission-1% max.

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Hadleyburg_Press 7 years, 5 months ago

In Steamboat, the definition of a-ford-able housing is living out of your rundown 1971 Mustang parked up at Dry Lake campground... Seriously, is the City Council capable of recognizing the "Law of unintended consequences" at any secondary point on the cause and effect rail or do they ride the train wreck of goverment's good intentions all the way to entitlement perdition?

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JustAsking 7 years, 5 months ago

Do the champions of affordable housing ever post here to answer any of the "how is this supposed to work" questions? I'd really like for someone to explain to me how affordable units at One Steamboat Place would be utilized. Let's see the financial side of the experiment.

Mandating humanitarian theories are a great way for the proponents to feel good--like they have done something for the less fortunate--but that doesn't mean the programs will actually work.

Surely there is some pro affordable housing person out there that can balance a check book. My question to them is; How can this work?

DO THE MATH. Show us the numbers.

Explain mathematically why buying an affordable property would be such a great deal. It looks to me that a buyer of affordable housing has a very high probability of getting seriously hurt financially.

Is this so different from the credit card companies who approve high limits for people who are financially naive and then sticking them with 24% interest?

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