I saw that the Denver metro area apartment vacancy rate is the lowest it has been since 2001. What does that mean for renters and just as importantly, homeowners? To answer this question, it is important to look at why the vacancy rate is so low right now.
The first factorcontributing to the lowvacancy rateis that there haven't been any new apartment buildings being built in the past couple of years. With financing so tight, there hasn't been money available to build new apartments, thus increasing demand. Factor in more people moving to Denver with fewer apartments available, and it starts to make sense. And with no apartment buildings in the works for almost any part of Denver, it holds that this trend should continue for quite awhile.
The second factor is that during a recession and economic downturn, lots of people will rent instead of buy due to uncertainty with jobs and may go so far as toeven bring on a roommate to help share some costs. But with jobs becoming more stable, many of these renters are tired of sharing space with a roommate and are nowmoving out on their own, thus further reducing the number of apartments available.
The first factorcontributing to the lowvacancy rateis that there haven't been any new apartment buildings being built in the past couple of years. With financing so tight, there hasn't been money available to build new apartments, thus increasing demand. Factor in more people moving to Denver with fewer apartments available, and it starts to make sense. And with no apartment buildings in the works for almost any part of Denver, it holds that this trend should continue for quite awhile.
The second factor is that during a recession and economic downturn, lots of people will rent instead of buy due to uncertainty with jobs and may go so far as toeven bring on a roommate to help share some costs. But with jobs becoming more stable, many of these renters are tired of sharing space with a roommate and are nowmoving out on their own, thus further reducing the number of apartments available.
So what does this mean to potential renters? Well, the outlook isn't good. With an estimated 180,000 young adults in the region turning 20 over the next five years, and no new apartments on the horizon, the demand will continue to grow. This means apartments will be even harder to come by and vacancy rates will continue to drop.
If you are a renter, you might think twice about leaving your currentapartment and testing the waters. And just as importantly, you may want to consider buying. With interest rates in the 4% range, it is very likely you can purchase a home or condo for even less than what you are paying in rent. These rates won't last forever though, so something to consider sooner, rather than later.
And if you are a homeowner, this information is great news. Have you been wanting to take advantage of these great rates and all the awesome deals out there right now, but feel trapped because of your current home? I am working with numerous home owners right now that have decided to rent their current home and find a move up property they know they can get a steal on and take advantage of these great rates. They will then rent their current home until the mark improves and sell it for a higher profit. With the rental market so strong, there has been no problem finding strong, qualified renters and in the end, everyone walks away happy.
If this is something you have been considering, then definitely speak with your agent about what it takes. It is an incredible way to take advantage of all this market has to offer and move into a new home you might not have thought possible at one time.
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