Are you planning to move to Colorado but clueless about the cost of living?
Well, it seems like everyone is interested to know the cost of living in Colorado nowadays. Be it the mountains, culture, or the weather, Colorado is officially one of the fastest-growing states in America.
According to the U.S. Census, Colorado has the 7th fastest growth rate in the nation; as the state has observed almost 80,000 people shifting and moving for good since 2017.
If you are thinking of shifting as well and want to know the cost of living in Colorado then you have landed at just the right place! Let’s have a look at the basic cost of living in Colorado for you to decide if it does come in your budget or not.
What is the cost of living in Colorado?
As stated above, Colorado has become one of the fastest-growing states in recent years and this only means that as the population increases the prices hike up.
The demand for goods, groceries, houses, and other services is bound to increase as more and more people are shifting to the state. We have diced up the exact cost of living in Colorado into main categories for your ease:
- Homes costs in Colorado:
The cost of houses is one of the major factors why the cost of living in Colorado is high. According to a real estate website Zillow, a normal house price in Colorado is $467,818 and these prices differ in fall and summer seasons. The peak season to buy houses in spring and summer. This is the median price for a house. The top three cities of Colorado; Denver, Colorado Springs, and Boulder have different prices compared to the median rate of the houses in the state.
Denver has the highest prices of houses in the state of Colorado. An average home in Denver’s metro area is priced 5 times higher than the median rate of house cost in Colorado. Even though according to the general guideline, you are not supposed to pay anywhere more than 2.5 times of the monthly income on a house purchase. But due to the increasing popularity of Denver as a suitable place for living, The housing prices are spiking up making it pricier to live as the cost of living gets less affordable with each passing month.
The average cost of a house in Denver is registered as $517,766.
The good thing about this is that because of the houses becoming increasingly unaffordable the real estate market has started to cool off and the prices have started to reduce as more and more people find it unaffordable to pay off the high prices in the form of mortgages and rent.
- Colorado Springs:
Colorado Springs is the fastest growing city of Colorado after Denver and the housing costs are much affordable compared to the metropolitan area. People like to come and live in Colorado Springs because it is much affordable compared to Denver as well as it offers several amenities that are state-sponsored.
The Colorado Springs real estate market is on the rise at the moment and it is becoming overall popular with the new migrants so this is the ideal time to settle down before the housing prices get out of reach.
The average price of a house in Colorado Springs is $388.907.
Boulder is comparatively a small town in Colorado but it has a feel of a big city. It is one of the most picturesque sites in Colorado. Initially, it was a getaway town for the Denver residents but now it is fast transforming into a full-fledged city; thus a price hike in the real estate market. The market is totally out of control. The average per square foot price has risen to a staggering $550+. An average house in Boulder is priced at $885,879, giving a tough competition to Denver.
Buying a house versus renting an apartment:
Renting is usually termed as more expensive compared to buying a house but as the Colorado market works on different dynamics, the rules are different here.
It is a dream of every person to own their place or home but if you are dreaming about living in Colorado then renting will be a better option as compared to buying a house – at least in the start when you first move here. According to a survey, renting a place is more feasible compared to buying a home. Renting is cheaper in 87% of the counties of Colorado. Another thing that suits the renters is that no real estate agents are involved and the renters find a place themselves and negotiate the deal on their terms as per their requirements.
If you are planning to buy a house in Colorado and have funds in hand then do it as soon as possible as the popularity and demand forecast that the price will rise.
Colorado is one of the top states which consumes less energy compared to the rest of the nation.
According to move.org, the average utility bill in Colorado is just $314.80 which makes it top the list of top 10 states which have the least expensive utilities. Just for reference, the average utility bill in America is $370.16.
The monthly utility bill includes:
- Natural gas
The average utility costs in Colorado are almost $56 less than the average cost of Americans. There are many reasons which contribute to these low costs compared to the rest of the country. They are:
- Central air conditioning is not common in Colorado:
This might come as a surprise, but many homes in Colorado do not have a central air conditioner. People of Colorado do not endorse the extensive usage of air conditioners, it might be shocking for people of other states but the truth is; thanks to the weather the central air conditioning is not necessary.
There are many houses across the state which do not even have an air conditioner as in all honesty, it’s not even required. The story is the same with many shops and small businesses. They do not have central air conditioning in their buildings as it is just not required thus one of the major reasons for low utility expenses.
Colorado people keep their doors open and enjoy the natural air and the environment. There is less noise pollution also like the noise created by the air conditions is almost minimal.
- Low price of natural gas:
Colorado is one of the top 5 natural gas-producing states of America. It has the 6th largest gas-producing site in the country. This fact makes it easy for the residents of Colorado to use the natural gas which is produced within their state premises, thus reducing the cost of transportation and delivery of the gas from outside the state.
The state itself uses just a quarter of the natural gas therefore the gas is available in abundance, thus reducing the cost of natural gas further.
Most of the houses in Colorado have gas cooking ranges and furnaces to keep their houses warm in harsh winters. The traditional electric stoves or centrally heated apartments are very least likely to be found in Colorado neighborhoods. Every 7 out of 10 houses use natural gas as the primary source of heating their homes and for cooking.
- Energy resources – renewable:
Most of the Colorado residents are opting for sustainability options for living. They have increased the usage of renewable energy sources which means that they have started to rely on energy sources that are renewable such as solar panels or energy produced by wind turbines. There are almost 2000 wind turbines spread all over the state of Colorado.
Colorado is also one of the leading states of America which is opting for renewable sources on a lighting speed and it has increased its renewable sources to a double since 2010.
- Water consumption:
The only unpredictable cost of utilities in Colorado is water! The cost of water consumption is unpredictable as it is one of the major factors affecting the monthly utility bill.
The water consumption prices differ depending upon the amount of snow and rain received by a particular region. Colorado recently found out that the fear of drought in the next 20 years is out of the question for the region. Water is one thing that you need to look out for when you shift to Colorado as it can cause your utility bill to skyrocket. Water is an essential part of daily life and is used for laundry, showering, kitchen usage, watering the lawn, etc.
● Food expenses:
According to the U.S. Department of Agriculture, an average American spends almost 6% of his monthly budget on food groceries and another 5% of his income on dining out.
So collectively, an average of 11% of income is spent on food expenses every month. So, for instance, if a person is earning $4000 per month, then he is spending $440 on his groceries and dining out. This average can differ from family to family as the number of family members varies. The average food expense in Denver and Colorado Springs is $340.
Colorado is considered to be one of the healthiest states of America as people are food conscious and maintain a strict diet while relying upon gluten-free and vegan options.
So do keep in mind the overall monthly food expense as on average it will be 11% of your total income.
● Transportation expenses:
Coloradans are very health conscious and they tend to adopt lifestyles that keep them healthy and active. They go on a lot of in-state road trips as well as mountain trekking and mountain drives quite frequently.
Let’s have a look at an average Coloradian’s transportation costs:
The residents of Colorado spend an average of $400 to $700 every year on gas. The annual cost per driver is $515 state-wide in Colorado which includes the maintenance and road repairs charges. This cost also includes the tolls prices of the express lanes as well as the other expenses attributed to transportation. If the average toll tag is kept into consideration; then on an average monthly basis, a Coloradian spends almost $4000 on gas and road/ expressway tolls.
Public transit costs:
Public transits reduce the cost of gas as they are easily accessible but they reduce the cost of driving and transportation only if you are living in smaller towns and have to go to bigger cities for work.
The Colorado Regional Transportation District (RTD) is the most widely dispersed public transportation network across the state. It offers bus, rail, and train services between Denver, Boulder, and other cities of the state.
A monthly pass can be made to avail of these services., the monthly pass is priced between $114 to $200 depending upon your usage of the regional service. You can always purchase EcoPass for employees, FlexPass, CollegePass, or a neighborhood EcoPass according to your need which will make you liable to attain more discounts offered by the regional transportation service.
Colorado has one of the highest car insurance premiums in America. The major contributing factor for such a high premium price is the mountainous area and the falling rocks along with the hail storms which come now and then without any prior warning.
The typical yearly car insurance rate is $1,435 in Colorado which makes it $119.58 every month. This is 0.6% higher than the average national rate of car insurance.
The overall transportation expenses in Colorado for an average resident are $633.58 per month.
● Medical and healthcare:
Another major factor to consider while determining the cost of living in Colorado is the medical and health care expenses. As stated, Colorado residents like to stay active and emphasize a lot on staying outside and are very health-conscious when it comes to food, exercise, or even hobbies.
The residents spend a major chunk of their income on multivitamins, gym memberships, organic food, and enjoying outdoor activities such as camping, hiking, and even skiing.
A healthy lifestyle reduces their medical expenses but it can increase costs in other categories.
The average monthly cost of medical insurance in Colorado is $340 without any subsidy. This is the national cost of health insurance determined by the federal government.
Colorado is one of the flat-tax states of American which means that no matter how much income you earn, whether little or more, you will be taxed for a flat tax rate of 4.63% of the income.
The basic sales tax is 2.9% whereas many cities of the state often add up their own sales tax over this 2.9%.
The state of Colorado taxes you for marijuana both for recreational or medical purposes. This depends upon the city as you might have to pay the regular sales tax plus will be charged for an additional 15% of sales tax along with 15% of excise tax.
Don’t forget the property tax which you need to pay annually if you own a real estate property in Colorado. The property taxes are lower in Colorado compared to the other states. The average effective property tax rate is only 0.57%. The reason the property taxes are low is that none of the property tax revenue goes to the state government of Colorado. All of the property taxes remain within the county where you reside, benefiting the region in terms of upgrading the amenities to serve you better.
The income from the property taxes is further used to pay for local government services such as maintenance of schools, roads, free family or public events, and much more.
An average Coloradian is taxed for $2,315 annually over a gross income of $50,000 making it approximately $192.92 per month.
So, does the cost of living in Colorado make it feasible to shift and start living?
Well after doing detailed research, we have concluded that it is expensive to live in Colorado. It largely depends upon the city you chose to live in. If it’s Denver or any big city then of course you will meet the higher prices of living but if you opt for lesser populated towns or smaller cities, the cost of living in Colorado will automatically decrease.
It largely depends upon the county you chose to live in Colorado to determine your exact cost of living.
According to howmuch.net, if you want to live comfortably in any given city of the state of Colorado then you should be earning a whopping $100,200 yearly to sustain an affordable living in Colorado.
There are many perks and definitely lifestyle up-gradation which the state offers to its residents but the fact remains that they are very expensive, indeed. If the lifestyle and the perks matter to you and you can strive hard to ensure that your bills are paid and you have a little bit of income left for recreational purposes then go for Colorado by all means.
The above list is just an overview of the necessities you need to arrange but of course, there are many other expenses attributed along such as car loans, or debts, or the education sector, all these expenses make the cost of living in Colorado expensive.