This newsletter is a compilation of news and information regarding the rental markets in Boulder and Broomfield counties and the economic status of and outlook for the area. The sources for the data include local and regional news media, association publications and seminars, and information gathered from contacts in the property management and real estate fields. We make every effort to cite all of our sources. Should we miss one please let us know so that we can correct the omission.

Company update

We have a new address! All our other info stays the same. You can now find us at....

2400 Central Ave., Ste. P-1
Boulder, CO 80301
303. 998.0754 Boulder
303.666.1111 Louisville
303.544.1411 fax

National: There are finally signs that the economy is starting to pull out of the slump it has been in for the last three years. The Commerce Department reported on July 29 that the U.S. economy grew at a pace of 2.4 percent in the second quarter of 2003. This is the best growth rate in over a year. Economists are hopeful for more growth through the second half of the year. Lower unemployment claims in July reinforced their optimism, with new claims reaching their lowest level in five months. (Boulder Daily Camera, July 31, 2003; Denver Post, July 31, 2003).

Mortgage rates are finally inching up from historic low levels. (Denver Post, July 13, 2003). As of the last week of July, rates were at their highest levels in 2003, breaking through the 6 percent mark. Economists cite several factors in the rise, including signs that the economy is improving.

If rates continue to rise this will probably result in a drop in sales prices. If this comes to pass we will have to wait to see how extensive it is and how that will affect the rental market.

Regional: Broomfield County is one of the 10 fastest-growing counties in the nation. Statistics show that Broomfield had 14,651 homes in 2000 (single family residences, town homes, condominiums, apartments, and mobile homes), with growth to 15,217 in 2001 and 16,284 in 2002. (Denver Post, July 18, 2003).

The median home price for a home in metro Denver rose to $238,000 in July, a 5.8 percent increase. The number of homes for sale also set a record, rising 20.4% from last year (22,233 in 2002 vs. 26,764 this year) according to the Denver Post (7/23/03) In the words of economists, the two statistics fly in the face of basic economic theory, and are a result of the historic low mortgage interest rates.

According to Economy.com, an online provider of economic analysis, the Colorado economy remains in a slump months after the official end of the U.S. recession. The analysis relies on employment growth to measure economic health and the job loss in Colorado is starting to moderate, it is by no means reversing. Colorado appears on track to lose jobs for two years in a row. (Denver Post, July 24, 2003).

One of the local indicators is stock prices for local companies. While the market is still deciding what to do overall there are indications that the local companies are making some progress (see table below)....

It is very difficult to get consistent information on the commercial market right now. The company that was tracking and reporting this information has ceased providing this data. All we can say is that there are lots of choices out there and there are bargains to be had!

In a telling move, a Denver developer turned his market rate apartment complex into a building for moderate-income renters. As the local economic downturn continued the developer, of the Broadway Plaza Lofts decided to target affordable housing and obtained some funding for the project from affordable-housing tax-revenue bonds. The vacancy rate for metro-area apartments was 13.7% in the first quarter of 2003. This compares to vacancy rates in the single digits for apartments with rents below the average. (Denver Post, July 13, 2003).

Commentary: We are still in the peak rental season and we are still seeing a large number of potential renters out looking. This season still shows a much larger number of rentals available from last year at this time. Pricing is still the biggest attraction. There are areas in town that are still very popular?this season it is the area just north of downtown. Those properties on the east and south sides of town are still renting but at a slower rate and a lower rent.

The Boulder County Apartment Association continues to work with the city attorney?s office to revise the requirement for property owners to pay 5.5% on security deposits returned to departing tenants. The two sides hope to have recommendations to the city council within the next few months. (Boulder County Business Report, June 13-26, 2003).

What is a competitive rent for your property? There is no one answer for everyone. Each property is unique and must take into account the geography, popularity, amenities, etc. to determine how their property should be priced in this market. Please contact us if you have specific questions or want more information. If you have a specific question about the rental market, a specific property, or property management in general please let us know. We will get that information to you and may include it in future newsletters.

We are actively working to grow the business and to add new properties to our management inventory. If you know someone that would be interested in our services please send them our way. We pay referral fees to anyone referring us business!

That wraps things up for this month. Again, if you do not want to receive these messages please call or email us and we will take you off this mailing list.