One thing is certain, the Denver Housing Market is HOT! With a shortage of sellers offering homes for sale Denver buyers are watching as new listings are met with multiple offers and record low days on market. For our Denver Urban clients we make sure to offer quick information on those great new listings and downtown Denver expertise on how to draft a competitive and smart offer.
But the group that is facing the largest challenge in Denver’s current housing market it may be those who are seeking Rentals. Rental rates are skyrocketing. Every month the cost benefit of owning over renting gets greater and greater. If you are having the big debate about renting or buying we have 10 points that might change your mind.
- The money you spend on rent is NOT an investment. That matters. It matters a LOT. What is even scarier is that, according to the Colorado Public Radio article Soaring rents squeeze more Denver families “1 in 4 renters in the Denver area are severely rent burdened, meaning more than 50-percent of their income goes towards rent”. That is a HUGE percentage to be spent on rent. So if you didn’t pay rent does that mean you could take 6 months off to travel the world. We are just curious.
- Rents can go up every year. Sure, you might be only spending 49% of your income on rent so you aren’t technically severely rent burdened. But what happens if this trend continues and your rents go up 5, 10 or even 20%. Will your income continue to grow as fast. If you have a FIXED 30 year mortgage in place you can avoid rental rate increase risk. I’m sure there is a renter in LoHi who could have bought 5 years ago that really wishes they bought when the could. I think LoHi rents are much different today than 5 years ago.
- Rental rates aren’t the only thing that continue to increase. We all know that the housing market is variable. Housing prices can go up, go down, or stay the same. The question is, with all the improvements being done throughout Denver what do you expect the market to do. For many buying today feels more comfortable than trying to guess what that same home might cost in 1,5 or even 10 years.
- There can be tax benefits to home ownership. Your accountant (or accounting buddy) would probably love to explain all the ways home ownership and mortgage interest can help you at the end of the year. Ask them more about how homeowners get the better deal than renters at Tax time.
- Denver is investing in infrastructure and transit. When you look at the direction a city is going from an urban development standpoint most analysts study infrastructure. Whooo boy does Denver have a GREAT project underway with the new Union Station Neighborhood and RTD light rail expansion. Over the next decade our city will be connected via new lines running North, South, East and West. Not only that, we have a new light rail going in to Denver International Airport. Add in our trail system, B-Cycle, buses, and many car share systems and we are talking about a major growth spurt that makes Denver an incredible place to live. If this drives up prices and rents do you want to be a homeowner or a renter.
- The city of Denver is building new neighborhoods downtown. Union Station isn’t just about light rail, it’s an entirely new downtown neighborhood with a new hotel, new restaurants, shops, office buildings (for new employees) and more. 14th Street is undergoing it’s transformation into the new Ambassador street, 16th Street is being evaluated for redevelopment, Sun Valley and the Stadium District may have a HUGE new riverfront development initiative, and so much more. All of these neighborhoods are great places to enjoy and can contribute to market growth. If this drives up prices and rents do you want to be a homeowner or a renter.
- The developers and apartment operators are investing in Denver. The new Cadence Union Station apartment building was just purchased for a rumored $70 million. AMLI is building a new apartment building in Riverfront Park. Wood Partners is almost done with the new Alta City House Apartment building in Union Station. And those are just a few of the many, many, many new apartments being built throughout Denver. These projects are asking for high rents and we are guessing their many analysts behind the scenes are anticipating those rents to continue to rise. You can’t fund a project in today’s capital market without banks asking to see some very very very well researched financials. If they see rents rising, and rising for a long enough period to pay off a major high rise, we think we’d rather not be a renter anymore.
- Restaurants, shops and a new Union Station Neighborhood King Soopers grocery store are on the way. Sure, LoHi, Jefferson Park, BallPark, and pretty much every neighborhood in Denver has seen a boom in restaurants over the past five years. What is so spectacular is that they are doing GREAT and even more are on the way. The dining scene and the energy of our downtown has changed and is continuing to blossom. All of these great amenities contribute to the great lifestyle of living in these awesome Denver Urban neighborhoods. The one complaint we often heard, at least for Riverfront Park, was the lack of a big grocery store. Guess what everyone, it should be open before the end of the year. As the neighborhoods continue to improve so does the demand to live there. You know what that means…
- People are relocating to Denver and our population is booming. According to the Metro Denver Economic Development Council website “Metro Denver has a population of nearly 2.9 million people, and has a growth rate that has consistently outpaced the national rate every decade since the 1930s. The region grew steadily in the past 10 years. And by 2020, Metro Denver’s population is anticipated to increase to more than 3.2 million. “. Those are a LOT of people who are going to be looking for a new place to live. You know what that leads to…
- Not sure where you are going to live in 10 years. Remember that you can always look investment options for your home even if you don’t live here. Maybe you will want to sell the property or maybe you can have a starter investment property. Contact one of our Denver Urban investment specialists to ask questions about how rising rental rates might benefit you as a part of your long term strategy.
And of course one of the best reasons to own a home is that it is yours to enjoy. Contact us today and learn how you can become a Denver homeowner and stop paying rent.