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Area housing woes helping rental stats

Foreclosures cited for a 7-year low in vacancy rate

By John Rebchook, Rocky Mountain News (Contact)

Published June 12, 2008 at 9:24 a.m.

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Record foreclosures in the Denver area have been good for rental homes, driving down the vacancy rate to a seven-year low.

Overall, vacancies in single- family homes, condos and other small properties for rent in metro Denver fell to 2.7 percent in the first quarter, a 36 percent drop from the 4.1 percent vacancy rate a year earlier, according to a report released on Thursday by the Colorado Division of Housing.

And the vacancy rate for single-family homes fell to 2.2 percent from 4.1 percent, according to the report authored by Gordon Von Stroh, a business professor at the University of Denver.

"Part of it is foreclosures," said Robert L. Alldgredge, principal of Jericho Properties Realty.

"Clearly, for the most part, most people who lose their homes turn around and rent other homes, not apartments," Alldredge said. "But because they don't have a mortgage, their monthly rental costs are 30 percent lower. And if the furnace goes out, their landlord pays for it."

Investors are increasingly buying foreclosed homes and profitably renting them, he said.

They do that by buying homes for about 70 percent of the previous sales price and then in some cases making a 30 percent down payment, Alldredge said.

Separately, the Home Builders Association of Metro Denver reported that 789 apartment permits were issued in the Denver area in the first quarter, almost a 14 percent drop from the 914 in the first quarter of 2007.

Susan E. Melton, of Assured Management Inc., said most of the homes she manages are for people who can't sell them, so they're renting them out until the market improves.

The median monthly rent for all homes was $950, 6.1 percent higher than $895 a year earlier.

rebchookj@RockyMountainNews.com or 303-954-5207

Comments

  • June 12, 2008

    4:49 p.m.

    Suggest removal

    SlouchingTowardBoulder writes:

    Douglas County, especially in Highlands Ranch within short driving distance to the light rail lines, is incredibly tight. The rents are high and going higher.

  • June 12, 2008

    5:09 p.m.

    Suggest removal

    WarrenJimmyBuffett writes:

    Why rent when you can you go live in an REO rent free?

  • June 13, 2008

    7:05 a.m.

    Suggest removal

    WarrenJimmyBuffett writes:

    Squatting.

  • June 13, 2008

    3:13 p.m.

    Suggest removal

    666 writes:

    Not sure it's a real good idea to rent homes from private owners right now...there's been a lot of landlords who've not paid their rental property's mortgages, and their renters end up getting evicted even though they've paid their rent faithfully.