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.

Banks to handle deposits faster

Starting on October 28, 2004 banks institute what is being called 'Check 21' and will be handling deposits quicker. According to the new rules, a check will clear the bank on the day of deposit. While this will eliminate the float on checks it will probably mean we will see an increased number of bounced checks until everyone gets used to the new system. There is no clear answer as to whether we will find out about bounced checks in a more timely manner.

We will be sending out letters to ALL our tenants letting them know about the change. It will be up to them to ensure their checks will clear.

National

The Federal Reserve Board raised short-term interest rates on September 21 a quarter of a point, the third increase in three months. The board expressed optimism a bout the economy and expressed no changes in its goal of raising rates at regular quarter point increases over the next year. (The Denver Post, September 22, 2004).

The Labor Department announced on Sept. 4 that job creation rose in August while unemployment decreased both contributing to the national economic recovery. Economists cautioned that the increases were far from strong and that the jobs recovery since the recession of 2001 is weaker than that following any other recession in the last half century. (The Rocky Mountain News, September 4, 2004).

Freddie Mac and Fannie Mae announced that U.S. home-price appreciation will slow as interest rates rise over the next year. Home prices rose more than twice as fast as wages during the last three years. (The Rocky Mountain News, September 11, 2004).

The stock market ended September with most dismal quarter since the first quarter of 2003. The market was besieged by oil price increases and negative earnings warnings and reports from a number of companies. (The Denver Post, October 1, 2004).

Regional

The Denver Metro Chamber of Commerce announced that the Metro economic index is finally climbing upward after twenty six months below a benchmark level of 100.0 established in 1995. The index is designed to predict future economic activity in the Denver metro area. (The Rocky Mountain News, September 4, 2004).

Four leading Colorado economists predict 50,000 to 60,000 new jobs next year in Colorado as well as increased retail sales. The state housing market, however, is vulnerable to a slowdown. Housing permits are on track to rise over fifteen percent this year, which is a growth that outstrips that of the population. Some economists state that such growth is unsustainable. (The Denver Post, September 15, 2004).

Denver home prices rose 212.6 percent from 1982 until 2003, outgrowing the appreciation in other Southwestern cities. A recent report by the Wellesley, Massachusetts-based Local Market Monitor said that the Boulder-Longmont area is overpriced and both Boulder and Denver areas are at a high risk for foreclosure. (The Rocky Mountain News, September 18, 2004).

Boulder County

The Boulder County Leading Economic Index rose one percent in the second quarter, for the sixth straight quarter of growth. Correspondingly, employment in Boulder county was 1.7 percent higher in the second quarter of 2004, as compared to the same period in 2003. Unemployment fell to 4.47 percent, the lowest level since the recession began in 2001. All told, the figures indicate a strengthening of the local economy, as Colorado follows the rest of the nation in the economic recovery. (Boulder County Business Report, Oct. 1-14, 2004).

Broomfield County

In Broomfield County, employment in the second quarter rose 2.7 percent from the first quarter of this year and 3 percent from the same quarter a year ago. Unemployment dipped significantly as well, to 4.9 percent as compared to 6.2 percent a year ago. (Boulder County Business Report, Oct. 1-14, 2004).

The residential rental market continues to be very challenging. This month we have good news and we have not so good news.

First, the not so good news. There is still a high vacancy rate in the metro area. Now that the July-August peak season is behind us it means that those vacant units will be asking lower rents to attract prospective tenants. We are still getting inquiries on our vacancies but most of these are looking for short-term rentals at very reduced rates. Everyone is being affected by this market--including the student rentals. Our recommendation for a vacant unit is to reduce the rent to get someone in the unit. Signing a lease through the winter and into the spring (i.e., May or June 1st) will give some cashflow and should improve your chances of securing a long-term tenant for next year.

The good news is there are signs of improvement. Looking at the chart of advertised rentals we see an interesting trend. After the peak season 2003 it was not until March '04 that the the numbers went below the 900 mark. This year we are already back below the 900 level just a few weeks after the Labor Day Weekend--normally considered to be the end of the peak season. The numbers are still way above where we were 2-3 years ago but many of our peers see this shortened cycle as a good indicator for next year.

Boulder County Apartment Association name change

The BCAA has changed their name to be the Boulder County Rental Housing Association (BCRHA). This to better reflect their activities across the entire rental market.

City of Boulder Discussing Barbeque Grills

The City of Boulder is reviewing the issue of barbeque grills located on decks. Currently no grills are allowed on decks with the grills located within ten feet of any combustible material (like wooden railings). This includes both charcoal and gas grills. The only current exceptions are if there is a sprinkling system above the grill location or for any gas grills with propane tanks under 2.5 lbs. This effectively means portable grills such as camping grills. Any updates will be passed on. (Dwellings, BCRHA, October 2004). City of Boulder Noise Violations

The City of Boulder is now enforcing noise ordinances on the Hill, along with violations for trash and weeds. One of the major changes is that police officers are issuing tickets to everyone present rather than one or two 'suspected' residents.

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.