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.

I would like to add my personal thanks to Kathy Foster-Patton, my associate, for putting so much time and effort into the newsletter. For the last year she is responsible for about 90-95% of the content in these newsletters. Without her, the quality and frequency of the newsletters would be very different. Scott Henderson, Owner

National Economic News

The three main stock market gauges finished 2004 up for the year and at their highest levels in over three years. Stock mutual funds had a solid performance for the year, with small cap equity funds and real estate funds scoring some of the biggest returns. (The Rocky Mountain News, Jan. 1, 2005).

Nationwide job creation in 2004 was at its highest pace in five years. (The Rocky Mountain News, Jan. 8, 2005).

Wholesale prices fell in December by the largest amount in 20 months. Industrial outputs also rose strongly and factories experienced their first annual increase since 2000. (The Daily Camera, Jan. 15, 2005).

Nationwide housing starts surged in December, rising 11 percent for their best year since 1978. (The Denver Post, Jan. 20, 2005)

Regional Economic News

Gasco Energy was the top Colorado stock performer, returning 232.8 percent in 2004. (The Rocky Mountain News, Jan. 1, 2005)

Foreclosures in the Denver area rose 30 percent in 2004 as compared to the previous year, reaching their highest level since the oil and gas bust of 1988. (The Denver Post, Jan. 4, 2005).

The Front Range Purchasing Managers Index rose over ten points in December, indicating that the weaker dollar has increased demand from abroad for Colorado goods. (The Denver Post, Jan. 4, 2005).

Area home sales in Boulder and Broomfield rose almost 4 percent in the fourth quarter of 2004, as compared to 2003. Median home prices in Boulder reached $498,500, while those in Lafayette declined to $269,500. Those in Longmont declined to $236,200. (The Boulder Daily Camera, Jan. 15, 2005).

Metro Denver home buyers put 3,492 homes under contract in January, breaking the previous record of 1999. Prices stayed flat. (The Denver Post, Jan. 25, 2005).

The Colorado economy ended the year with its first job increase in three years, up 0.6 percent from 2003. (The Denver Post, Jan. 26, 2005).

The corporate economists for Vectra Bank predicted that up to 65,000 jobs could be added to the Colorado economy in 2005, as the state catches up in the economic recovery. (The Denver Post, Jan. 27, 2005).

The metro Denver apartment vacancy rate grew to 10 percent in the fourth quarter of 2004, despite falling in the third quarter of the year. (The Denver Post, Jan. 27, 2005).

Most of the market is quiet but we are seeing some activity in the non-student rentals. An slightly increasing number of calls from prospective tenants is coinciding with anecdotal evidence of a better job market. Due to the high number of available units it is still a renters market but edging up.

As you can see from the chart we are still a ways from where we were in 2002. However, the February numbers for the last three years show we may have peaked last year. This time in 2003 there were 483 rentals advertised, in 2004 we had 934 (ouch!), and this year we are back down to 667. I think this year is also a bit skewed as our source for these figures is now including an expanded marketing area. Tough to know precisely but we want the trend to continue.

The student market is kicking into high gear again. Next week (2/16) CU will hold the first of this year's off campus housing fairs. Last year our student properties were 100% rented within 3 weeks of the fair. This year we are already scheduling showings--before the fair! Portions of this segment are still showing some insulation from the market in general. However, some of the student properties further from campus are still struggling. We will have a more concise report in next month's newsletter.

There are a number of bills being talked about in the state legislature. Some of the changes being talked about are:

• reducing the time allowed to return security deposits from 60 to 30 days
• limiting late fees to a percentage of the rent
• limiting rights to remove tenants, etc.

We will keep you posting as these progress.

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.