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 Picture

March was a volatile month for the stock market, with indexes losing the gains they made over the past two months, only to regain them at the end of the month. Terrorist concerns played a role in pushing the market lower after the major attack in Spain. Especially hard hit were U.S. airline and travel stocks. (The Denver Post, Mar. 12, 2004). The stock market pulled back up after the Commerce Department released a report confirming that the economy grew at a 4.1 percent annual rate during the last quarter of 2003. (The Denver Post, Mar. 26, 2004). Strong profit outlooks fueled the market even higher at the end of the month. (The Denver Post, Mar. 30, 2004).

Job data indicated a small amount of growth in February, confirming the ongoing "jobless" recovery. The unemployment rate for the nation remained unchanged at 5.6 percent. Low interest rates continue to counter the impact of static job growth, with the stock market maintaining its strength. (The Rocky Mountain News, Mar. 6, 2004). A survey shows, however, that more U.S. employers say they expect to add workers in the next quarter than in any three-month period since 2001. (The Denver Post, Mar. 16, 2004). Mid-month, some economic reports signaled hope that jobs may be coming, as unemployment claims fell to their lowest level in three years. (The Denver Post, Mar. 19, 2004).

Consumer confidence nationwide continues to be strong, as comsumers have increased spending for 48 quarters straight. Unfortunately, much of the spending is for credit-card, auto, and consumer debt. (The Denver Post, Mar. 7, 2004).

Fuel prices have risen to their highest levels since prior to the Iraq war, approaching $3 per gallon in some cities. So far the economy is weathering the high prices and has not sucumbed to inflation or economic stagnation. (The Denver Post, Mar. 10, 2004).

Regional News

Regionally, Colorado continues to see improvements in the local economy. Consumer confidence in the Rocky Mountain states rebounded faster than any other part of the country during the past year, as reported by the Conference Board's Consumer Confidence Index. (The Denver Post, Mar. 4, 2004).

Falling mortgage rates pushed up metro home sales to levels 33% over March of 20003. The median price of a single family home was $231,000, an increase of 3.1% from a year ago. The number of homes on the market rose, also. (The Denver Post, Mar. 24, 2004).

Colorado's technology economy is rated No. 3 in the nation, inspite of the downturn it has suffered over the last two years. It trails Massachusetts and California on the "State Technology and Science Index," which measures the capacity of states to compete in the information age. (The Denver Post, Mar. 31, 2004).

On March 31, the Colorado Department of Labor and Employment released statistics indicating that although the state unemployment rate is decreasing, businesses aren't adding any more jobs than they were a year ago. Analysts suggest that some people are starting their own businesses. (The Daily Camera, Apr. 1, 2004). This coincides with other local analysts (Rocky Mountain News, Apr. 10, 2004) . The figures from the US Bureau of Labor Statistics show that Denver ranked as the 3rd worst in the nation for job losses. This is somewhat contradicted by the decrease in unemployment. Some say this is due to the BLS not including the creation of small businesses in the area.

Colorado's top performing stocks and mutual funds during the first quarter were in the biotechnology and energy sectors. Manufacturers also did well, but many tech and telecom companies fell. The top performing stocks were ACT Teleconferencing and Titanium Metals Corp. The top mutual funds were Janus Overseas and Invesco Energy. (The Denver Post, Apr. 1, 2004).

The residential rental market continues to be very challenging. In discussions with other property managers and owners we are hearing that "...the phones are just not ringing." Some of this is due to it being the "mud season" before the summer rental season kicks in. We are beginning to see some increase in the numbers of non-student renters looking for rentals. We will let you know if this trend continues of if it is just a temporary uptick.

The chart here shows that the total number of advertised rentals continues to remain high for this time of year. As stated in earlier newsletters this is due to a number of factors. These include:

• People displaced from local jobs
• Homes being rented because the owners cannot or will not sell
• Lower than normal infulx of potential renters due to the local job market
• Low interest rates enabling people to buy rather than rent
• Developers continuing to build multi-family housing across the area

In a normal year the area would see vacancy rates in the low single digits. Right now the area is still seeing vacancy rates around 9-12% depending on the area. TheBoulder County Apartment Association estimates that the vacancy rates will remain high for at least another year. Being a renter's market, price is still the overriding factor.

New Interest on Security Deposit Rules

The new rules regarding interest paid on security deposits went into effect April 1. From April 1, 2004 through December 31, 2004 the interest required to be paid on security deposits is 1.08%. The new rate for 2005 will be announced in December of 2004 and be for the entire calendar year. The new rates are based on an average of one year certificate of deposit rates at three local banks and/or credit unions. (Dwellings, Boulder County Apartment Association, April, 2004).

Boulder Spring Clean-Up

The City of Boulder's organics-only Spring Clean-Up begins Monday, April 19. The city will pick up leaves, grass clippings, and tree branches from curbside. Non-organic materials will not be picked up. All organic material collected during Spring Clean-Up is recycled into mulch and will be available to the public in May. (Dwellings, Boulder County Apartment Association, April 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.