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Boulder Rents Jump As Home Ownership Scares Potential Buyers

December 4, 2018

A for rent sign in Boulder seen earlier this fall.

Average rent for 1-bedroom apartments

Boulder 1BR

December 2015: $1,244

December 2016: $1,470

December 2017: $1,788

December 2018: $1,901

Longmont 1BR

December 2015: $1,131

December 2016: $1,191

December 2017: $1,230

December 2018: $1,264

Just as it looked like rent prices were starting to stabilize in Boulder, a new report released on Monday by Abodo , an apartment search site, showed a surprisingly sharp increase in rents during November and December, historically slow months for the real estate market.

According to their national apartment report study released each month, after prices dipped throughout the summer, the average rent for a one-bedroom apartment in Boulder jumped 7.9 percent in November , the highest such increase in the country, and another 7.3 percent in December , the fourth largest increase in the country.

While predictions by the Department of Housing and Urban Development in 2017 suggested that a number of new developments scheduled to come online over the past two years would serve to stabilize the market for at least a while, the demand for rentals has been insatiable, thanks to a change in consumer behavior.

“There is a lot of pressure on rental properties in Boulder,” Sam Radbil , a spokesman for Abodo wrote in an email. “Millennials are renting apartments for longer periods of time than the generations that came before them, housing inventory is tighter, the housing crash has scared a lot of potential homeowners and baby boomers are downsizing as they look for a more convenient lifestyle in trendier areas of the city.”

Michael Menard , the owner of Property Management Inc.’s Flatiron Group , largely attributed the increase in rental prices to a housing market that has become so expensive, those who want to buy can’t afford it, and those who can are either concerned about overextending themselves before the housing bubble bursts again, or cannot find the property they want due to a lack of available inventory.

According to Zillow , the median home value in Boulder is $725,700 , a 5.4 percent increase over the past year, and with the median price for homes currently on the market being $825,000, Zillow predicts home values will rise another 3.9 percent within the next year .

Due to this increased pressure on the rental market, Menard said he is already fielding inquiries about vacancies next August.

“I would say about half of the inquiries are for recent rentals and half are out into next year because there’s been such activity and such a shortage in the 2018 season,” he said.

With no signs of growth slowing, both in terms of real estate prices as well as population, Menard , doesn’t see any reason for rental prices to come down any time soon, even in the rest of the county where rental prices have remained relatively stable since hitting highs in 2016.

“There are some new projects coming online, but there’s also continued growth in the area in terms of business and certainly in terms of the university, so I expect some moderation. But I still expect positive growth,” he said. “Then you look at the rest of the county and I think you’ll see that growth elsewhere as a result of some of the shortages in the city of Boulder.”

Barb Riley, a realtor for Re/Max Alliance who specializes in the Frederick and Broomfield area, said that the spillover from Boulder residents moving to surrounding communities could soon be compounded by more spillover from the Denver area.

For the time being, however, rents in other parts of the county remain flat. Robert Danos , the owner of PMI Inc. a property management firm in Longmont , believes enough supply has been added to the surrounding communities to continue that trend for awhile.

“We’re not seeing the escalators that we’ve seen in the last three years,” he said. “Normally things slow down during the holidays. They haven’t in years past, but we’re starting to see that this year.

“I interpreted that has as things starting to level out and I see it staying flat for a while unless something amazing economically in these parts like a major employer come into the area.”

John Spina: 303-473-1389, jspina@times-call.com or twitter.com/jsspina24

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