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Renting on the Rise! Not Just Fort Collins, Loveland Too!

June 6, 2011

Reports show that renting is trendy, and it will be trendy for the next 5 to 7 years even though home prices in Larimer County are holding steady. The Colorado Division of Housing in a report that in the first quarter of 2011, vacancy rates fell 16.6 percent in 5 metropolitan areas: Fort Collins-Loveland, Greeley, Grand Junction, Colorado Springs, and Pueblo. In addition metro Denver and 33 other markets show an overall decrease in statewide vacancies to 5.5%. In comparison, at the same time in 2010, the vacancy rate was 6.6%.

As far as Loveland goes, vacancy rates are even lower! The dropped from 5.5% in the third quarter of 2010 to 4.1% in the 1st quarter of 2011. Locals who are in the business of renting said they haven’t seen this high of demand in years, and the reasons for the rental boom are a little surprising.

Here is a little re-cap on how the rental market has changed in the past decade.

In 2000, the market was strong for rentals. Fort Collins private investor Bob Miller erected a yard sign in front of his first and only rental home on Shields and Magnolia streets. He could barely renovate fast enough to keep up with all of the calls from interested parties.

In 2003, Miller, now vice president of the Northern Colorado Rental Housing Association, “got no calls whatsoever.” People were buying homes, getting Adjustable Rate Mortgages incredibly easy, without the thought that the interest and rates could go up. When rates went up people were unable to pay up when interest rates on their subprime mortgages increased in 2005 and 2006.

Late 2008 the largest historical price drop occurred, now referred to as the “Housing Bubble Burst”. After that, 31.6% of households were renters. Now 38 million households fall into the same category.

Today, with his current renters likely to renew their lease, Miller said it feels almost as it did 11 years ago. “It’s taken a long time to get back up there … but we’re probably back to where demand was in 2000.”

A big change was also noticed by a local property management company, who experienced 10% vacancy rates before the bubble burst, and now has just below 1% vacancy. Henderson Management & Real Estate oversees almost 700 rental properties up and down the Front Range, 80 percent in Loveland.

The perception of renting has changed and its becoming a lot more common. People nowadays don’t anticipate staying in a home forever so renting is a much more viable option. Not only that, but renting allows a maintenance free lifestyle with much less stress about the condition of the house, cost of repairs etc. When in a rental, people can spend their time doing more personal things rather than housework, especially on the weekends.

All in all, renting is a very viable option for people who need a more flexible, less expensive and price guaranteed situation. Although the market is increasingly becoming more competitive for prime areas, it is highly unlikely that the rental market will suffer while the economy recovers.

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