At a moment when Colorado is cited as the nation’s 10th least-affordable state for housing, some of the most reasonable offerings for buyers now are coming not from older houses, but from ones that are brand new.

Denver-based Oakwood Homes has four separate communities located on the outskirts of the metro area where it can deliver a 2-bedroom 2-bath single-family home with a 2-car garage for under $400,000, according to Ariel Knobbe, senior marketing director.

That figure is less than 60% of the current median price of a single-family home on the market, and slightly less than a median-priced townhouse or condo now, according to the newest numbers by the Denver Metro Association of Realtors.

Launching 177 homes

Oakwood announced Thursday it would launch another 177 homes including models priced from under $400,000, at its communities in Aurora and Commerce City.

The company currently ranks as the state’s 7^th largest builder, according to Knobbe. A subsidiary of Berkshire Hathaway, Oakwood also rates as the state’s fastest expanding builder, with year-over-year growth of 40%

Knobbe said that expansion owes directly to Oakwood’s outreach to buyers struggling to afford housing.

Colorado’s unaffordability rank is actually an improvement from last year, when the state ranked as 8^th least affordable, according to a new report by the National Low Income Housing Coalition, released Thursday by the Colorado Coalition for the Homeless.

That report cites the Denver area as among the most expensive in the state, along with Boulder, Eagle County, Pitkin County and Summit County. A fulltime worker in Colorado, the report said, needs to earn $36.79 per hour to afford a modest, 2-bedroom apartment, while not spending more than 30% of their income.

Meanwhile, Knobbe told the Denver Gazette that new homes offer a route for families needing affordable housing to explore buying, rather than renting.

“We have some homes priced from the mid-$300s,” Knobbe said. That’s a real price, she said, that can deliver a finished home with minimum finishes and some options.

Looking further out

The tradeoff for buyers, Knobbe said, is in looking at locations further out from the urban core.  “If you look and see where Oakwood is, that’s part of the equation,” she added.

Those include Bennet, 15 miles east on I-70 past the E470 beltway, where Oakwood is building at Muegge Farms. The builder has two collections of homes there, each priced from under $400,000, including a “Muir” plan from an American Dream series listed on its website as priced from $337,990.

That price is almost half that of the median Denver area single-family home last month – $665,895, according to DMAR.

In a statement timed with the announcement of the new starts, Oakwood’s Denver Market President Ryan Delp cited two other locations where Oakwood could deliver a home under $400,000, including Reunion in Commerce City, E. 104^th Avenue at Tower Road, where the company took over as developer from Shea Homes in 2017.

Delp also mentioned Green Valley Ranch, Oakwood’s original master plan along Peña Boulevard, where its newest offerings lie east across Picadilly Road in the city of Aurora.

Broader trend

Those areas each show a broad trend of expansion toward areas where there is more land to build, Oakwood’s Knobbe said. She noted one other setting outside the 11-county Denver area with prices starting from the high-$300s. That’s at Thompson River Ranch, 28 miles up I-25 beyond E-470, at Johnstown – attracting commuters from Fort Collins along with those heading south for work in the north Denver metro area.

With drive time being a downside, Knobbe said that shoppers looking at affordability accrue another advantage by considering new homes rather than older ones, aside from price.

“You’re getting new appliances, new HVAC systems, and a new roof,” she said. “On older properties there are rising costs of maintenance, and for renters, rents historically rise.”

She adds that Oakwood operates a homebuyer club that works with buyers to raise their credit scores and has a pilot program with the Colorado Housing and Finance Authority that can couple down payment assistance with rate buydowns, for buyers who meet lower-income qualifications.