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 added new functionality to the rentals section of our website and continually seek to improve it. The address remains the same - please check it out at www.persmgt.com

National

The nation's economy continues to improve. In February, Federal Reserve Chairman Alan Greenspan announced that the economy had shown impressive gains, but warned against the growing federal budget deficits that could thwart long-term economic health. (The Denver Post, Feb. 12, 2004). In other news, consumer spending was up while consumer confidence declined, primarily as a result of concerns about job growth, in the period up to 2/25/04. (The Denver Post, Feb. 25, 2004). However, by March the Consumer Confidence for the Rocky Mountain Region showed the biggest gain. The region showed an increase in the Index to 103.4 from 68.8. (Daily Camera, March 4, 2004).

Unemployment is constant at 5.6% nationwide with a growth in temporary positions. The slow growth in the number of full-time jobs following increases in temporary positions is contrary historic indicators. (Daily Camera March 6, 2004)

The stock market wavered around in February, finishing the month up, but with minimal gains compared to the last few months. (The Rocky Mountain News, Feb. 28, 2004).

The Commerce department reported that the U.S. trade deficit surged to an all-time high in 2003, 17% higher than the previous record set in 2002. The deficit was $489.4 billion. (The Rocky Mountain News, Feb. 14, 2004).

Regional

The Creighton University price index study, released in February, predicted economic growth in the mountain west over the next six to nine months, but also predicted possibilities of inflation. A separate study released on Feb. 2 showed that Colorado's manufacturing economy shrank for the third consecutive month in January. (The Denver Post, Feb. 3, 2004). By March the survey showed a strong economy in Colorado, Wyoming, and Utah. (Daily Camera, March 4, 2004).

In a surprise result of a survey on the fastest growing job markets, Denver, Boulder, Fort Collins and Colorado Springs all made the top twenty listing for their categories. The "boom town" survey identified the places around the nation expected to create the most jobs in the next four years. (Rocky Mountain News, Feb. 27, 2004).

Home prices in Boulder and Longmont grew only 1.07% in 2003, as compared to a U.S. average of almost 8%. The two cities ranked next to last in a report on 220 metropolitan areas. The same federal report stated that Colorado, as a whole, appreciated 2.7%, ranking it 49th in the nation. Flat home pricing growth is attributed to the lack of job creation in the state. Home prices in Broomfield were also flat, while those in Erie, Louisville and Superior declined. (Boulder Daily Camera).

The regional commercial real estate market continues to struggle, with a vacancy rate of 23% compared to a normal rate of around 10%. The University of Colorado Real Estate Council conducted their annual conference and reiterated that the vacancy rate will come done quickly if new companies come into the area or local employers begin hiring on a large-scale manner. Most of the experts at the conference didn't foresee either of those activities happening in the near future, predicting that the commercial vacancies will continue at the exisiting rates. (Boulder Daily Camera, Feb. 26, 2004).

Control in the residential rental market continues to belong to the renters as many owners offer potential tenants enticements such as one or two months of free rent and even security deposits as low as $99. Some landlords are finding that vacant properties right now are sitting open for two to three months, leaving them desperate to find tenants. (Boulder Daily Camera, Feb. 15, 2004).

The most recent report on apartment permit activity in the nation disclosed that Denver had 2,861 permits in 2003, as compared to 6,158 in 2002 and 11,613 in 2001, drops of 53.5% and 47%. (Units, February 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 fourth 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.

Despite the high residential vacancy rates existing in Boulder and the north Metro area, the City of Boulder has approved hundreds of new residential units. This is an opposite tact to their proposals of previous years to limit growth in the city in order to offer better housing/jobs balance. (Dwellings, March 2004).

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.