Boulder Real Estate Rental Market Tightens

As the price of Boulder real estate continues to appreciate and the mortgage industry changes make it harder to buy entry level homes, Boulder is seeing a tightening rental market.

While this is good for landlord property owners, it’s making it a little tougher for renters. All the more reason to be careful with your credit and work hard to save a little money. Those that have even modest down payments and good credit can become buyers instead of renters.

Boulder has seen a relatively soft rental market in recent years. Historically this has not been true. Up until about 2002 or so, Boulder real estate investors have enjoyed very low vacancy rates; sometimes as low as less than 1%.

With the change in lending around the early part of this decade, just about anyone that fogged a mirror could get a loan. Many folks were getting 100% financing, interest only loans and ARM’s. So, the natural progression of this was that lots of renters became property owners which made the rental market very good for tenants and not so good for property owners as rents plummeted.

Now once again we’re seeing very low vacancy rates. Apartment vacancies — not including the ‘university area’ — dropped to two percent during the last three months of 2007. That made the city’s rental market more tight than any other city in the Denver metro area.

Near C.U. the vacancy rate was a little higher at 3.7%. Louisville, Lafayette and Superior and running at about 3.3% and Longmont is at 11.5%. Guess we know where not to be a landlord right now…

Usually anything below 5% is considered to be a “tight” rental market by most people’s standards. It’s always about supply and demand. Now that many of the former renters that moved into the ‘property-owner’ arena are coming back to renting, the demand is matching or almost exceeding the supply.

Other than the large complex near CU was built in 2002, the market in Boulder has been contracting. Available rental units have steadily declined. There’s very little new construction. Sure, we’re seeing a lot of Boulder condos being built again but projects like The Peloton, The Walnut and others are not being developed forĀ  the investment/ rental market.

Perhaps the Landmark Lofts will be somewhere in the middle but I think the price range is still higher than most investors are looking for in that kind of product.

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