Interesting article in John Rebchook's blog today about the long-term prospects for landlords in the seven-county Denver Metro region... although rents and vacancy rates have basically been unchanged over the past year, signs point to a fairly serious shortage of rental units over the next five to seven years.With more than 30,000 high school seniors graduating each year, and only about 5,000 new apartment units per year coming online since 2001, you can see the opportunity that exists for landlords over the next few years. Add in the fact that Colorado was the fourth-fastest growing state in the country last year and you can see that sooner or later we're going to start running out of housing, again.
It is true that the difficult economic times of today are affecting behavior... the home ownership rate is falling, kids are moving back in with their parents, families are "doubling up" to save money... but sooner or later people will want to get back out on their own, and there simply isn't enough new inventory coming online to meet that future demand.
After the 2001 economic downturn, vacancy rates in Denver spiked by 10% or more and rents crashed hard. But go back and reread the first paragraph of this post... in 2009, in the worst economy in 70 years, vacancies and rents were essentially flat. That's called "hidden strength", and it's an indicator that this decade could be a really good one for Colorado investors and landlords alike.
