John Rebchook reports, Home Rentals Scarce

Vacancies for-rent condos, single-family homes, and other small properties across metro Denver fell year-over-year to 3.8 percent during the second quarter, shows a state report released today. According to a report released by the Colorado Department of Local Affairs’ Division of Housing, the vacancy rate was 5.2 percent during the second quarter of 2009, and was 3.1 percent during the first quarter of this year. The second quarter’s vacancy rate is the lowest second-quarter rate reported since the report was started in 2003.

The trend of low vacancies and rising rents likely will continue, experts said today.

“There’s been a lot of conversation about multi-family (apartment) rentals growing in popularity, but that is true about rental, single-family homes, too,” said Gordon Von Stroh, a University of Denver business professor and author of the report. Von Stroh said that the population grows, there are not enough new apartments being built to meet the demand, while at the same time new-home construction is a fraction of what it has been when measured by historic levels.

Also, many people who lost their homes either through a foreclosure or a short sale.

The lowest vacancy rates were found in Arapahoe County and Douglas County, both of which reported average rates of 2.9 percent. The highest vacancy rate, likely driven by rental houses left behind by students during the summer break, was 8.6 percent in the Boulder/Broomfield area.

Vacancy rates for all counties surveyed were: Adams (including Brighton, Westminster, Commerce City, Thornton), 4.2 percent; Arapahoe (which includes Aurora, Centennial, Littleton, and more), 2.9 percent; Boulder/Broomfield, 8.6 percent; Denver, 3.4 percent; Douglas (which includes Parker, Castle Rock, Lone Tree and more), 2.9 percent; and Jefferson (which includes Golden, Lakewood and Arvada), 3.3 percent.

Rents rise

The average rent for single-family and similar properties rose year-over-year to $1027.78, rising from 2009’s second-quarter rate of $1016.35. The second quarter’s average rent was down from this year’s first quarter average rent of $1035.56.

“In general, average rents continue to go, up, but not at a rapid pace,” said Ryan McMaken a spokesperson for the Colorado Division of Housing. “With such a low vacancy rate, we’d expect to see more rent growth, but the employment situation is putting some downward pressure on rents.”

Reluctant landlords not making money

...

“If a fix-and-flipper bought the home during the last 18 months, they’re probably doing OK,” Alldredge said. “If they paid cash, they’re obviously doing fine, renting it. And if they have an 80 percent loan, they’re probably also doing fine. Everyone else is probably losing money. They’re just not taking as big of a monthly hit as they would if they had to cover their entire mortgage amount.”

...

Read the rest at Inside Real Estate News by John Rebchook