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. It is issued during the first week of the month. 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 News

We recently (today!) added new functionality to the rentals section of our website.. The address remains the same - please check it out at www.persmgt.com

National News

The national economy slowed at the end of 2003, but ended the year with a 4% annual rate advance. The Department of Commerce announced that the gross domestic product statistics indicated that the economic recovery was on solid ground. (The Denver Post, Jan. 31, 2004)

The Dow Jones industrial average and the S&P 500 index hit 22 month highs in January, pushed up by positive earnings reports, and then settled lower at the end of the month, due to profit-taking. (The Denver Post, Jan. 22, 2004 and Jan. 25, 2004)

In 2003, the national homebuilding industry had its best year since 1978. Pushed by the low interest rates available, the house market was a major contributor to the improvement in the national economy. (The Denver Post, Jan. 22, 2004). With the current increases in mortgage rates, economists are predicting a drop in housing starts in 2004. If the economy continues to improve, job creation could prove a factor to fuel an increase rather than a decrease in starts. (The Denver Post, Jan. 20, 2004)

Regional News

It appears that Colorado's high technology industry is finally starting to stabilize. Job losses have slowed, indicating the worst may be over. (The Rocky Mountain News, Jan. 10, 2004). The Denver Chamber of Commerce predicts 1.2% job growth this year, equating to 15,800 jobs primarily in the areas of educational and health services, professional and business services, transportation, and warehousing and utilities. (The Denver Post, Jan. 23, 2004)

Colorado continues to lag the nation as the Colorado unemployment rate rose to 5.8%. This is above the national rate of 5.6% for December 2003. Boulder's rate was unchanged at 4.9% (The Denver Post, Jan. 28, 2004)

Denver area home prices remain flat, only 0.4% above a year ago. The median price of a single family home in January was $225,500, according to real estate reports. Sales remain strong, but a high inventory offers buyers lots of choices. (The Denver Post, Jan. 28, 2004)

Commercial real estate space in Denver continues with widespread vacancies, and is ranked near the bottom in a recent study of 59 nationwide markets. Landlords are aggressive in offering deals to fill their spaces, with some buildings offering pricing at $17 per square foot, as compared to $26 per square foot three years ago. (The Denver Post, Jan. 14, 2004)

Denver metro apartment vacancies dropped in the fourth quarter, spurred by falling rents and "free-rent" deals. Landords are taking an aggressive tack to lure renters into their units. The average metro vacancy rate was 10.9% in the fourth quarter, as compared to 11.1% in the third quarter and 11.7% in 2002. (The Denver Post, Jan. 29, 2004)

According to Dr. Gordon Von Stroh at DU the apartment vacancy rates were up in Boulder from the last quarter of 2003. The vacancy rates were up in the CU area about 3% from 3QTR 2003 and about 0.5% outside the student rental (i.e., university) area. There were similar numbers in the remainder of Boulder County with the exception of Longmont with a 6.1% rate junp. The average vacancy rate in Boulder County is about 10% compared to Douglas County (19%) and Adams County (15%). The Western Region overall experienced a drop of about 1.7% in vacancies. (Daily Camera, Jan, 29, 2004)

Changes in interest on security deposits

The Boulder City Council gave preliminary approval to changing the interest paid on tenant security deposits. This must still pass the third reading at Council but indications are this will pass. If it does, the City will set an interest rate once a year. Landlords will have to pay interest based upon the rate in effect when they RECEIVE the security deposits. Many, if not all, software applications for property management will track this automatically.

What is a competitive rent for your property? There is no one answer for everyone. We will be working with each of our clients to determine how their property should be priced in this market. Please contact us if you have specific questions or want more information.

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.

Please take care!

Ray, Scott, Kathy, Kim and Frank