COVID Pandemic Causes Major Shift in Denver Rental Housing Trends
It is safe to say that the events of 2020 were far from expected. However, we can begin to predict its impacts on the local market, based on the trends we are currently seeing. We know that the COVID pandemic has been a catalyst for lifestyle changes and that those changes have sparked a notable shift in housing demand. For the first time in 10-years, average rental rates in the Denver urban core have declined. At the same time, demand for single family rentals in the surrounding suburban communities has never been stronger.
This change in the type of demand is happening at a time when inventory for single-family homes is down almost 60 percent, according to the Colorado Association of Realtors.
From a nationwide perspective a recent study from John Burns Real Estate Consulting, stated that single-family home price appreciation
was up 9.6 percent and single-family rent was up 3.8 percent. Apartment rents were down 1.1 percent nationwide. When we look at the three major counties in Colorado, we see that Denver County median home sales prices are up 17.9 percent, Weld County median home sales prices are up 12.1 percent and El Paso County median Home sale prices are up 15.2 percent, according to the Colorado Association of Realtors for December Home Sale prices.
Trends indicate that many people want more space, more space to work from home and more space from other people. With many of the lifestyle amenities that attract people to living in the urban core shuttered due to health restrictions, it is easy to see the appeal of moving out of the city and into suburbs. These newly developed requirements coupled with extremely low inventory and sales prices at an all-time high are driving many would-be home buyers to turn to renting for the conveniences it provides.
So, what does that mean for you as a real estate investor?
It means that now is the best time to have single-family rentals in your portfolio. Suburban homes in and around Denver are appreciating at an incredible rate and the demand has never been better. With steady rent growth and low turnover, the net operating income of your property is likely on the rise. If your property is renting below market rate, you can stand confident knowing that if you decide to raise rent, the increased demand will be worth the short-term vacancy.
Do you have questions regarding your current market rent and the changing environment? The property management team at Atlas Real Estate can offer free insight into current market rent for your investment property. Our team of professionals always have their ears to the ground in terms of local rates and can provide consultation on the smartest way to proceed with capitalizing on the current rent growth trends.
Contact me at Cory@realatlas.com for more information.