The American West's Manufactured Housing Crisis

In the interior West’s explosive real estate market, the dollar is the broker of conquest, and false narratives the blankets delivering socioeconomic disease.

Have you heard about real estate prices in the West lately? The doublings, triplings, or even quadruplings of house price over short time periods. If you have heard, I bet you also heard that there are typically 20 or more offers on every house for sale. And you may have also heard that offers made more than 24 hours after a property is listed are dead-on-arrival – because the seller already had too many offers and took the highest offer. All of these stories are true, and they’re true in Colorado, Utah, Montana, Idaho, and all of the interior-Western states. 

But I bet you haven’t heard from any of the locals about what’s going on and why? Their perspective is highly unpopular and unfit for the news media to air… so I’m going to air it. 

The price of housing started it’s sharp upward trajectory sometime in the later ‘70s. Sometime after John Denver (whose real name is Henry Deutschendorf, Jr.) released his pokey-dokey transplant anthems, the whole state started to experience a surge of population and interest, which you can see clearly in the population growth charts. 

The uptick in population in Colorado in the ‘70s was enough to make the prices less comfortable, to the point where some economic displacement began. Then, the snowball started to form, and eventually, the avalanche. 

Hey, it’s not the best Crayon drawing in the world, but it tells the story accurately. Population growth in the West ramped up in the 1970s, then went explosive / exponential sometime in the early 2000s. Suddenly, something changed, and the perception of what’s here and what it would bestow on your identity changed. Right now, Colorado’s population is doubling every 20-30 years, and every person who has moved here since 1970 is a direct driver of urbanization. Image Credit: Author

Fast forward to the 1990s in Colorado, and Aspen had become untouchable to anyone who wasn’t “rich,” and Boulder became untouchable to live in for anyone who hadn’t purchased a house already. My family’s first home in Boulder was purchased for $8,800 (yep, for a free-standing home) around 1950, which was worth approximately $200,000 by the mid-’90s, and is today valued at $1.1 million. Adjusting for inflation, it is clear that prices vastly outstrip inflation. 

The situation in 2022/2023 looks about like this: 

1. Housing on the Front Range of Colorado and in all of the mountain towns have doubled in price in the last 1-3 years. And that’s a doubling on top of the doubling that occurred in the prior 1-3 years (depending on the area). 

2. We have some situations where prices have doubled in under a year. If you’re trying to buy a house in Colorado today, you will be told that if you don’t have a full cash offer, you’re at a disadvantage. And, you’re at a disadvantage if you’re not offering over the asking price. 

3. Within the last couple years, we’ve seen houses that sold for $400,000 turn and sell for $850,000 only nine months later. We’ve seen shoddy houses by the railroad tracks list at $330,000 and sell in under 24 hours for $100,000 over asking price … in cash. 

   

   Think I’m exaggerating? Here’s the price history table from Realtor.com for a house near mine. For the purpose of keeping the recent buyer’s safety in mind, I’ve cleaved off all address information. $130,000 in 1991 dollar value is $285,000 in 2023, which indicates that there is $580,000 of “I want it NOW, it’s MINE!” perceptive bubble sitting on top of the build value. That’s … ludicrious. When I say the market is off the rails, I mean it’s way off… Image Credit: Realtor.com

4. We have 20+ offers per house, even if the house is in horrible condition. Bidding wars are resulting in at-asking offers being the lowest offer, and lowest by tens or over a hundred thousand dollars. 

5. Houses with basic surface remodels – paint and floors – selling for $200,000 over the sale price from less than a single year ago. Imagine that, $20,000 in labor and materials creating a ten-fold return… 

Details about the housing situation in the interior West goes on and on – and they’re all insane. And it’s not just the Front Range “metro” (yes, we have a “metro area” now…) of Colorado, it’s Boise, Idaho, and Ogden, Utah, Scottsdale, Arizona, and anywhere else you can name … the interior West’s real estate market went full mushroom cloud starting in about 2016. 

Contrary to popular belief, high house prices aren’t good for the locals 

Contrary to popular belief, exploding housing prices aren’t good for the people already here – unless they want to leave. For those who consider an area home – and perhaps always have, and were there before it was fashionable to live there, explosive housing prices are more like rising water in the engine room of the Titanic. It’s a recipe for an economic and financial drowning. 

Oddly, this is as true for homeowners as it is for renters. Rents go up on a year-to-year basis, but if you’re a homeowner, the risk is manifested by making it difficult or impossible to change homes, unless you’re doing great financially. Imagine trying to change homes when there’s a 20:1 ratio of buyers to homes, and even with some equity, you’re the soon-to-be lowest bidder. Imagine you’re living on a retirement income, or you chose a public service profession, and you’re unable to take on more mortgage to make up the difference to step to a different house because the scales of property value have changed underneath you. 

I took this image from an airplane. I believe it is over Aurora, CO. Even though I took this over 10 years ago, it shows the rampant sprawl on the Colorado plains. Once a high-plains short-grass prairie ecosystem, now it has endless fields of McMansions, roads, strip malls, eastern tree species, and water-hungry grasses. All of this is new, and all of it was built after the 1990s. Photo Credit: Author

The oddity in the interior West is that most of our available jobs, until recently, were not of the kind you would find in the heavily urbanized coastal areas of the U.S. We had farms, some heavier industry, colleges, and some tech companies. The people in these areas have educations built for these sectors – and are not widely educated in the more urban, Ponzi-like sectors of finance, business, and some tech. Take the generalization with the usual caveats — but the point is that we didn’t typically see the high incomes locally that are producing personal surpluses of $500,000 or more to pay cash for a house here in the West. 

Given the modest lifestyles that Westerners established in the region, the new wave of population growth and the ensuing changes have been shocking. And most of all, the new wave has been heavily displacing those rooted here. Rents in Denver have doubled in the last 2-3 years. A recent article showed that rents over the last 5 years have increased by “167%” (pulling from memory, feel free to research it.) 

About a decade ago, I had to stop and snap this photo of a new condo complex in the middle of what used to be a farm field. It was striking because it was surrounded by farm fields, with no other development around it. This scene today is completely different — it is completely cemented into a totally developed area with other buildings like it. You can no longer see the moutains or the plains from where this photo was taken. Photo Credit: Author

For renters, the cost of living has changed fast – and substantially. Imagine your monthly rent payments doubling over less than five years. The first year, you’re paying $1,000 per month, and the fifth year, you’re paying $2,000 per month, the tenth year, you’re paying $4,000 per month. Homeowners of the mortgaged-variety get to keep their same ole payment with responsible borrowing practices, but under these conditions, they’re basically stuck – they can choose to leave the area entirely, choose to risk trying to get into another house nearby, or else they’re basically trapped. They can rent their house, but not everyone has the personal tools or tolerances for being a landlord, so that isn’t for everyone.

The situation for locals in Colorado and neighboring states is harrowing – whether they’re renters or mortgaged buyers. The sudden and sharp rise in costs is fully driven by people moving into the area in large numbers and suddenly. The fundamental economic functions of supply and demand are in full control here. Demand sharply increased, supply was unable to react as quickly, and so price went up. And price went up-and-up-and-up until prices started to vastly outstrip local wages. 

Housing prices in the West outstrip local wages

The paradox in the West’s new housing market is that house prices now outstrip local area wages. Meaning, if you try to buy a house in the West today, the wages in the area are probably not enough to occupy even a basic property. As Kai Ryssdal on NPR’s Marketplace says, “Let’s run the numbers…” 

My little tile on the Federal taxation map shows that the median taxpayer income is about $115,000 per year (including those filing jointly). Then, in my little tile on the real estate map, the median housing price is around $650,000 (it was around $300,000 only four years ago). As a performance indicator, that’s a five or six to one ratio of total house price to annual income. Fascinating, considering that in the 1980’s and prior, the ratio was closer to two to one. Given today’s interest rates, thanks to the economic calamity we all just endured, the payments are out of this world. The dollar amounts needed to just buy in at the most base level are phenomenal. 

To buy a house in my area right now, you would need $130,000 in cold cash just to buy a home with a 20% down payment (the “financially literate” minimum baseline). Then, you would need a guaranteed $3,600 per month for the base payment – not including the $400-600 per month in utilities. And, sure, if you’re making $115,000 per year, or a take-home (after tax) of $7,200 per month, the $4,000 per month core living expense isn’t detrimental – but it’s still more than half of your net income on a healthy six figure income. 

Since numbers make most peoples’ heads spin, the takeaway point is that living costs in the interior West have gone absolutely bonkers, rapidly. And the main takeaway is that housing costs in the area are now vastly out of reach of anyone who didn’t already have big resources, or who didn’t have an exceptional and well-above-average paying job. The sudden change hasn’t been good for those already here – the sudden change has been detrimental to every single person who didn’t want to leave. 

When house prices increase, so do all other prices

The price of housing doesn’t just increase and leave all other prices the same. Nope, the price of gas, food, materials, services, and even government goes up. When the prices of everything goes up suddenly, those who were living modestly are suddenly underwater. 

Take a gander at California. Gas prices there are often over $5 per gallon, while they’re around $3.50 in Colorado. The price of apples is higher; Flour, bread, fruit, 2x4’s for house construction, and every single other good goes up in price when there’s high demand. The price of a plumber is higher, the price of construction workers, and police officers are higher. The price of everything goes up when the price of houses increases. 

The sudden increase in property values and rent costs in the interior West has left many people needing to find new ground. The displacement that occurs under these conditions is real. Not everyone is an engineer, doctor, or lawyer. The people who handle administrative tasks, work retail, or work as nurses in hospitals – all end up pushed down and out in these local economies when they suddenly shift like they have here. 

I am sure there are people who will argue that it’s a good thing, and is temporary pain for long-term gain. But I absolutely dare that person to say that to someone being displaced by a sudden, fashion-based, and selfishly driven population boom. Ask the person who isn’t able to pay rent near their work anymore because prices shot up suddenly, and now need to commute in. Ask the librarian who’s on a public employee wage what it’s like to not be able to move in their home area, due to house prices going too hot for their wages to keep up with.

In some cases, competition isn’t good – in some cases, it’s more like conquest. 

The change is sudden, and the driver is a false narrative

The best part of understanding the real estate explosion in the mountain West comes from talking to newcomers. If you ask, “What brings you to Colorado?”, their answer is invariably, “The mountains. I wanted to be closer to nature. And I just like how laid back it is here.” 

You can ask that question to 100 people who moved here between 2015 and today, and 98 of them will tell you that’s their answer — and it will be almost verbatim. The other 2 of 100 will tell you it was for a job. Try it, you’ll be laughing at these clowns by interviewee number nine. 

There’s a great irony in having Colorado’s entire real estate market grow explosively, which has directly caused rapid land development, urbanization, and the ‘resort-ification’ of our wildland areas, by people who claim they came here to be closer to … nature. 

If you look around Colorado, you’ll see countless scenes like this one. A street that turns into an old farm field that is no longer being farmed. If you drive by this scene six months later, there will be a strip mall or a housing development. The whole front range and mountain areas have these. These signal development that’s already in the oven, and is about to bake into the landscape, permanently. Photo Credit: Author

If you take a look at the urban and suburban areas of the West, you’ll see massive amounts of new development dwarfing the old. You’ll see once quiet trailheads being developed into massive parking lots with bathroom and fee infrastructure. And, you’ll see highway expansions, shopping centers, industrial parks, and tourist attractions rising from the plains and mountains as fast as plants sprouting from soil in a time-lapse on a PBS nature video. 

I’ve watched all of the post-’70s urbanization and resortification of Colorado take root. The town of Superior didn’t exist when I was a kid. It was a broken down coal mining town with one street in 1985, and is now a sprawling suburbia, stacked against a fire-adapted high plains ecosystem, and Rocky Flats¹. Oh, and an old dump and burning coal seams... I digress.

The great irony of those coming for “nature” (the place, the entity, the brand…²), and driving the single biggest boom in domestication of the Western environment in the entire history of European-descended occupation of these lands…

Even better is how people are moving from less-laid-back areas (as stated, this is what they’re fleeing, apparently), to a more-laid-back area (as stated, this is what they came for). Colorado’s Front Range metro area has never been as aggressive, pretentious, and up-tight, as it is today. People driving luxury cars aggressively, packed highways with every driving rule known being violated, and people earning their New York City salaries, wedging out all the locals here who make simple little local wages … 

This scene in Denver traffic looks calm — especially to those from big cities. But this image was taken on a tame afternoon in Denver in about 2011. I snapped the photo because this section of highway was built due to growth in the ‘00s, and it’s already maxed out. Imagine this on a snowy day with an extra 1 million people! No hyperbole there — that’s the reality today, 12 years later. If you want to see a bunch of laid-back-Coloradans, go sit in this traffic jam today… Photo credit: Author

The narrative those driving our real estate markets into the stratosphere appears to be disconnected from their actions. Those driving urbanization, social and economic change, to be more like they places they came from truly believe they’re here for something different. The narrative they come with is false because they’re fundamentally transforming the place into something the people here never wanted it to be. And they’re somehow all embedded with the same narrative, despite there not being a single clear source of that narrative. How did people from Los Angeles, CA, end up with the exact same set of words in their mouths as someone from Atlantic City, NJ? 

Myths and the broker of conquest…

The great myth that has helped to octuple housing prices in Colorado in recent years is live and well. And it appears to come with a class element. How many people from the interior West can say that they can spoon up $800,000 in cash today for a new house? How about $500,000? Or even $200,000? The answer is – very, very few. And what that reveals is that the people driving our market aren’t from around here. 

In the real estate market, money clearly talks. It always has. Those who owned land in the distant past were Lords, and most millionaires in America today made the brunt of their money in real estate. And, as with all markets, those willing to pay for something and those willing to sell, undergo a negotiation to meet where their willingness intersects. If you’re willing to sell at $2, and the buyer is willing to buy what you’re selling for $2, you have yourself a deal! 

But there’s more to the story with the West’s current real estate market. Houses have become a battleground for people from other places to out-compete the locals at an alarming pace, and to an alarming extent. As house prices rise, so do all others in an area. As the number of people rises, demand for services rises, and so does price. As the dominant industries shift almost overnight, those making local wages suddenly can’t live the way they were able to before. Wages don’t rise quickly – and those with big resources from the urban areas of the country can outbid the locals for almost everything. The dollar has a far more complex role in the West today than buying power and what we see on the surface. 

In the interior West’s explosive real estate market, the dollar is the broker of conquest. 

The money isn’t coming from inside the West. It’s not coming from people from the West. The money isn’t coming from people born here and acculturated to the whole of the West – its environment, weather, and modest economy. The money is coming from people who want what we have, they have more than we do, and want to buy us out. And if we weren’t “bought-in” yet (as in, we are renting a dwelling or starting out our adult lives), our only option is to find a way to make more money, or to leave. That’s no longer a market in reasonable stasis – that’s a market being driven by conquest. 

The “Housing Crisis” in the West is a flimflam 

Every single news story I’ve seen about America’s housing situation is couched as a “housing crisis”, and the cause is always “low supply.” And it’s absolute horseshit… 

The media, as usual, gets most of the facts wrong. They dither the details. And they misconceive the scope, scale, and generalize extremes to be norms. With the real estate situation across the country, they really get it wrong. 

Coverage of the supposed housing crisis completely ignores what’s happening with migration in the country. We have coastal urbanites leaving places like Washington, DC, Los Angeles, CA, and Tampa, FL, for places like Denver, CO, and Boise, ID. We have social meltdown sending human rats from New York City, NY, Portland, OR, and Houston, TX, to places like Scottsdale, AZ, Bozeman, MT, and Boulder, CO. Oh, and most of the Midwest is emptying out into the mountain west. How could the media possibly miss this?

The housing crisis in the U.S. is almost entirely sequestered in the mountain West, California, and hip, resort-like places – the Austin, TX’s, Miami, FL’s, and Jackson Hole, WY’s of the country. 

What’s not being disclosed is that while Colorado has 20 home buyers to every one available property, places like Ohio, Michigan, Iowa, and Indiana have so many empty housing units, you can have your choice of thousands of single-family homes in good condition for under $120,000. And you can buy one that needs work for well under $100,000… with land! The same situation exists in: Illinois, Kentucky, Alabama, Missouri, Mississippi, Kansas, Oklahoma, and so on … most of the midwest and south are emptying out. A quick gander on Zillow will reveal what I’m highlighting. And, Zillow doesn’t even tell the whole story – that and other real estate listing sites are only showing what’s for sale – not what’s abandoned and not listed. 

The real estate crisis in the country and the West isn’t a real crisis – it’s not a shortage – it’s an identity and fashion crisis that is sending people to the interior West in droves. That’s a marketing-manufactured crisis. 

Next time you hear someone complain about how hard it was to buy a house in the West … 

The housing crisis in the U.S. is a manufactured crisis. It’s manufactured by imagery that sells the West, imagery that makes people from urban environments suddenly imagine themselves in “nature,” and an over-caffeinated breakdown of the urban environments in the country due to a cultural schism born from over-connection to other peoples’ thoughts (via the internet, apps, 24/7 news, and social media).

Real estate and living costs in the West are off the rails right now, and they’re not off the rails because the locals asked for it. These markets are off the rails because of a sudden surge of highly programmable people envisioning themselves living the dirtbag lifestyle in the West. Oh, and — dirtbag lifestyle — that thing eastern urbanites invented to make the lives of Westerners kitschy, sexy, and something to emulate³. 

If you know someone who has “gone West” to make their new life, just know you’re interacting with someone who has decided to throw their hat in the ring to box some local out of their home area. It means you know someone who is part of the 20 people making offers on every one available unit of housing. And, they’re here and helping to drive prices into outer space. 

And, I get it; That’s a market. If someone is willing to pay, and another is willing to sell or rent, that’s how it works. But what the interior West is going through is a market where the dynamics are closer to that of conquest than stasis – and the money moving our markets today is all from outside the area. The locals able to stay have decided to try to swim, try to swim harder, and become the indentured servants⁴ to the new wealth here today –  because that’s the only option the market has given us, other than to leave.

The people moving to the interior West today are driving our real estate markets in a way we’ve never seen before – for reasons we’ve now heard for 50 years – but in numbers that put our population growth and urbanization on an exponential curve. They’re not victims of the high house prices – they’re the cause. The false narratives to get closer to nature and the mountains, meanwhile converting as much land to domestic space as possible is proof of the falsehood. Every single person that moved to the interior West after 1970 or so was a driver of rapid urbanization and the total conversion of the interior West into the same domestic hell the people moving here came from. That reveals the false narratives in those moving here and their stated reasons about why. 

Here are some tangible statements to help with talking to a transplant about their hardship in finding housing in the West:

• “It sounds like you think you’re a victim of the high housing costs, when you might be the direct cause … have you considered moving to an area of the country that isn’t in a real estate feeding frenzy?”

• “I empathize with your perception of the situation, but I sense you may not yet realize that the market dynamics in the West are currently entirely driven by exurban migrants, like you, driving demand up in a place that has low supply.”

• “Hey, I know you want to get closer to nature, but if you [actually] read the book, “Walden” by Henry David Thoreau, you might realize that moving to nature is pure nonsense — your nature is the environment where your mind formed.”

• “I know it’s hard to see, at first, but areas where house prices are increasing at rates topping over 100% per year are being harmed by people moving into them. If you find another place to live, you won’t be hated by the locals and might be able to have a great life outside the fray.”

• “I know you think the mountains are calling and you must go, but you know they don’t have a phone, right? They’re not actually calling you … that’s just a really brilliant marketing campaign.”

• “If you move West, you know the locals already hate you, right?”

• “Have you read, “There’s Gonna Be A War in Montana” by Isaac Simpson yet? Might want to before you move there … sounds like the locals aren’t happy about your return to nature baloney…”

• “Going to urbanize, Utah, eh? Utah has quite the East Infection already… sure you want to make that situation worse?”

After reading through that list, I realize this should have been titled, “How to lose a friend and get punched in the face.” Ay dios mio…

In the end, I realize the West is toast. House prices are now untouchable for anyone without preexisting resources – parental funds, trust funds, high-paying and existentially depressing jobs, or just mystery money. Those moving West today are making an entirely voluntary choice to relocate to a place they know nothing more than what the advertisements or their resort-vacation told them, and they’re making the voluntary choice to box the locals out of their homes and sustainable costs of living. And they all apparently think it’s reasonable to pay $800,000 for a house that would cost only $200,000 to rebuild if it burned to the ground today. The dollar is their broker of conquest on the road to achieving Manifest Destiny⁵.

The Fleeting West is written by a rooted Westerner with a lifetime of experience watching the displacement of those rooted here to make way for urbanization and Manifest Destiny.

Footnotes and Citations

1. Rocky Flats is an area Colorado locals know well — it’s the country’s first superfund site, where the U.S. Government is cleaning up its mess from the ‘50s, where they were manufacturing nuclear bomb triggers, and a bunch of the plutonium caught fire and polluted the area. It’s a real gas! Check out the Wikipedia entry on it for more: https://en.wikipedia.org/wiki/Rocky_Flats_Plant

2. When I mention “nature,” it’s somewhat loaded, and the following post unpacks the meaning a bit:

Let’s talk about wildness in the West

3. See also, “Posers” - https://fleetingwest.substack.com/p/whats-a-poser-and-why-is-the-west

What’s a poser, and why is the West full of them?

4. Indentured servitude is a term I use for those who are deeply indebted to the point that they no longer may choose what they do for a living. More about that in this book, if you’re interested: https://www.amazon.com/Fiat-Standard-Slavery-Alternative-Civilization/dp/1544526474/

5. Manifest Destiny is that pesky thing we learned about in middle school that made no sense then, and as a very non-intuitive title, but you’ll hear a lot about it here as time goes on. Here’s a nice little brief on the subject: https://www.ushistory.org/us/29.asp