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.

Stocks rose immediately following the presidential election, with the Dow Jones seeing its best day in 2004 on November 4 and the S&P closed at its highest in almost two years. (The Denver Post, November 5, 2004).

The Labor Department announced that that 337,000 jobs were created nationwide in October. This was nearly double what was expected, the largest increase in seven months, and pushed the stock market up again. (The Rocky Mountain News, November 6, 2004).

The Commerce Department announced that the U.S. trade deficit went down to $51.6 billion in September as exports posted their best month on record. (The Denver Post, November 11, 2004).

The U.S. Labor Department announced that the productivity of U.S. workers rose in the third quarter of this year at its slowest pace in two years. This is seen by some as a signal that companies may begin adding workers to meet demand. (The Denver Post, November 5, 2004).

The Federal Reserve Board enacted an increase of one fourth of one percent to short term interest rates up to 2 percent. The board implied that it would continue to raise rates gradually over the next year. (The Denver Post, November 11, 2004).

Wholesale prices rose in October by the largest amount in almost 14 years. Energy and food costs were the major contributors to the increase. Economics were immediately worried about inflation and predicted that the Fed will increase interest rates again at their next meeting in December. (The Denver Post, November 17, 2004).

Oil prices dropped near the end of November, which served to push up the stock market. (The Denver Post, November 23, 2004).

In a new issue to worry about, the dollar slid to a new all-time low against the euro. Although the dollar has been in the doldrums overseas for quite a while, the new low brought about concerns regarding foreign investment and consumer spending. (The Denver Post, November 24, 2004). The dollar fell even further the next day, but there was no action by the national banks to intervene. (The Denver Post, November 25, 2004).

The Commerce Department announced that orders for durable goods dropped in October, reflecting the rockiness of the current economic recovery. (The Denver Post, November 25, 2004).

All three stock indexes closed out the month of November with their best gains of the year (The Denver Post, December 1, 2004).

First, the bad news...

Xcel Energy announced another rate increase to take effect in December, raising rates 23% from last year for residential customers. (The Denver Post, November 18, 2004).

Metro Denver office space continues to have millions of square footage vacant with a vacancy rate of up to 23 percent. (The Denver Post, November 10, 2004).

Now, the good news...

Once again Dr. Richard Wobekind (CU Boulder Leeds School of Business) has released his analysis and projections for the Colorado economy. In summary, he expects that, although local job growth lagged behind the rest of the county, that 2005 will see Colorado jobs outpace the national trends.

He expects that every non-farm sector will see growth in the coming year. The job growth rate predictions range from 0.6% in construction (900 jobs) to 0.9% in government (3,200 jobs) to 4.9% in natural resources (700 jobs) to 4.8% in professional & business services (14,800 jobs). Overall, he expects an overall growth rate of about 2% which equates to approximately 43,100 jobs in 2005.

PLEASE NOTE: the complete, detailed economic report is available from the Leeds School of Business at the University of Colorado in Boulder. You can get their contact information at the Leeds School of Business website.

The following are the Regional Stock Gainers according to the Boulder County Business Report, Nov. 26-Dec. 9, 2004.

• Dynamic Materials
• Raindance Communications
• Vitesse Semiconductor
• Array Biopharma
• Spectralink Corp.
• Sima Therapeutics

Once again we are well into the slow rental season. We are still seeing the same factors affecting the overall market. The include lower numbers of people moving to the area, a higher number of properties on the market, and interest rates still very low. One increasing concern is the high number of foreclosures in the area.

However, there are positive indications. These include:

• The chart above shows that the number of rentals this time last year were 50% higher than this year. We are still in a renter's market but the trend is definitely continues toward the investor.
• We are also seeing an uptick in the student rental market in Boulder. Some students are already looking to rent for Fall 2005 in anticipation of a tightening rental pool.
• Rents are inching up in some very localized areas.

The following items are prohibited in dorms at the University of Colorado: candles, incense, halogen lamps, wall hangings, clip-on lights, smoking materials, and bean bag chairs. All of the items except the bean bag chairs are considered fire hazards. The bean bag chairs contain styrofoam, which gives off toxic fumes as it burns. (Dwellings, Dec. 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.