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: A private survey of economists predicted last month that the U.S. economy would strengthen in the second half of 2003 and continue to expand in 2004 at its fastest pace in four years. (Denver Post, August 12, 2003). This was further emphasized by figures released by the Commerce Department detailing that the economy grew at a 3.1% annual rate in the April-to-June time frame. Consumer, business and military spending are together creating the statistics behind a more optimistic outlook. (Denver Post, August 29, 2003).

Mortgage interest rates continued to rise in August, and consequently the numbers of new home mortgages and refinances have fallen from the numbers of the previous three months. The interest on mortgage rates has risen a quarter of a point in the last month, and more than a point since mid-June. (Denver Post, August 27, 2003).

Regional: The national trend to export jobs to overseas sites and take advantage of cheap labor continues to impact Colorado and the rest of the nation. IBM, Microsoft, and Denver-based Quark Software have announced plans for new jobs?all of which will be located overseas. Over the past few years, Colorado companies such as Storage Technology, Agilent Technologies, Actiontec, Quantum, PeopleSoft, and Ciber Inc. have moved operations overseas or announced plans to do so. (Denver Post, August 3, 2003).

In Denver, apartment vacancy rates are leveling out, leading experts to believe that the worst is over. Consumers searching for apartments are now very price-sensitive and expect very low prices. Apartment managers have been slashing rents in order to keep their units occupied. The vacancy rate for Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson counties was 13.1% for the second quarter. This is unchanged from the first quarter, and up from 9.3% a year ago. Analysts are encouraged because the rates have not risen. (Denver Post, August 5, 2003).

Through the first half of 2003, new apartment building permits have dropped nearly 60% from the same period in 2002. Local economists are predicting that apartment construction will continue to drop until the economy picks up and vacancy levels decline. (Denver Post, August 5, 2003).

Median home prices in Denver reached a new high in August. The median price for a condo climbed to $155,000 as compared to $153,000 last August. The median price for a single-family home reached $238,500 as compared to $223,045 last August. (Denver Post, August 27, 2003).

According to a report issued by the Denver Chamber of Commerce, the metro Denver economy is still dormant. There are 14,700 fewer jobs than existed a year ago, with an unemployment rate of 6.1%. (Denver Post, August 7, 2003). There have been few, if any announcements of company relocations or job creation in the local area.

A bright spot in the regional economy is the tourism arena. Colorado's tourism industry has begun to rebound from the past slow year, with strong business in July and August. (Denver Post, September 2, 2003).

As you can see from the chart above we are still in a very challenging market. Price (i.e., rent) is still THE factor in getting properties rented. We estimate that rents are down about 30% from two years ago and about 10% from last year. The single family homes are the least sensitive to these pressures with the apartments most sensitive. One can still see signs offering free rent and 'no deposit' move ins at some apartment complexes.

The total rentals appeared to peak in July and we are seeing the same trend from years past. After Labor Day the market begins to slack off dramatically. Just as in the real estate sales markets the higher end rentals are very slow while the low-end properties seem to be in higher demand. The biggest factor here is probably the lower numbers of families moving into the area.

One disturbing trend we see is the increasing number of landlords offering leases without requiring security deposits. Our experience shows that the lower the deposit the less the tenants take care of the property. We are not feeling this pressure but will be watching this with interest. Our policies still require deposits from ALL tenants and, if their credit or background checks are borderline, we require last month's rent in advance. With few exceptions we are not having problems getting these funds as security.

We are now 89% rented with most of the remaining 11% being new properties. Those properties we have managed for over 6 months have a 3% vacancy rate. We are very pleased with this rate and remain hopeful our vacant properties will rent soon. The peak season (July & August) was still a good season. This was a very positive indicator that the market is coming back somewhat.

License Amnesty: The City of Boulder has declared an amnesty for all unlicensed rental properties for the rest of 2003. Boulder requires that all rental properties within the city limits have a rental license. The penalty for failing to license a property is $2,000 per violation and up to 90 days in jail. To take advantage of the amnesty program, a property owner should apply to the city and license their rental property. The licensing program requires a safety inspection by a qualified inspector. All our properties within the City of Boulder have current licenses. If you do not have a copy of the license for your property please let us know. We will forward a copy to you.

Weed violations: In the City of Boulder, it is a violation to have weeds 12 inches tall or more on your property. The enforcement staff are writing tickets for this violation?there is no warning. The ticket includes a summons and hefty fine. We continue to monitor this at each property and every lease specifies the tenant's responsibilities. We make sure they are in compliance.

Signage: City of Boulder code requires that "for rent" and "for sale" signs must be placed on the owners' property only. It is not legal to place signs between the sidewalk and the curb, as that is not part of the owner's property. Other requirements include: a) one sign per property; b) the sign must set back 18 inches from the sidewalk; c) the sign must not be in the public right-of-way; and d) the sign must be removed within seven days of sale or lease. Violators can be fined up to $1,000 and receive 90 days in jail. This is really our issue and we do comply. We do feel you need to understand how the situation unfolds.

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.