Boulder County Rents Stabilize — for Now
After two years of double-digit increases resulting in record high rents in 2017, the market throughout Boulder County has finally begun to level out thanks to a large influx of newly constructed housing.
The question is how long this trend will continue before rents skyrocket again.
For the time being, real estate brokers feel they’ve found a happy medium that could last for several years.
“The inventory is starting to catch up with demand so my prediction is that we’ll start to see things get back to more of a normal pace,” said Bob Danos, the owner of PML Inc., a property management firm in Longmont. “There’s a risk that we could oversaturate the market and cause prices to drop, but I don’t see an excess of construction in the future. I think the scenario we’re dealing with right now is that we’re building at a controlled pace where we’ll be able to maintain our demand.”
During the next three years, according to the Department of Housing and Urban Development, the estimated demand for rentals in the Boulder County area is 2,325 new market-rate units. With 950 units either recently completed or under construction, that demand will be met for the first year and most of the second year, especially with CU’s push to house 40 percent of the student body on campus, including a new 575-bed dormitory in the Williams Village area that is expected to open for the 2019 fall semester.
The additional dorms might help ease the market for an extended period, as students make up an estimated 14 percent of renter households in Boulder, but real estate brokers remain confident demand will continue to grow throughout the region.
“I do think that we’ll see a flatter market through the rest of this year and the first quarter of next year due to the large surge of developments,” said Angela Vander Meyden, senior vice president of corporate housing and property management for Housing Helpers. “But after that I think we’ll see rents start to increase again next spring and summer. Usually, you see a push of building and then a time for that absorption so people can move in and stabilize those properties, then builders push again.”
Currently, the average rent for a one-bedroom in Boulder County has stabilized at roughly $1,550 per month. Sam Radbil, a communications manager with the real estate research firm Abodo, said that cost is the new norm for major cities, especially those encompassing college campuses.
“The days of finding an apartment for $1,000 in a big city are long past,” Radbil said.
“But I don’t think we’re going to get back to the 2015-2016 market. We saw a lot of the prices jump up so high because so many luxury apartments got built for the millennials who were interested in smart home technology and modern amenities, even on college campuses, but I think it will be pretty steady moving forward.”
The slowing in the run-up of rent increases locally mirrors a national trend, according to a recent story from the Los Angeles Times, which pointed to data released last month by real estate firm Zillow that showed the national median rent for a vacant apartment dipped in August from a year earlier. It is the first time that’s happened since 2012.
John Spina: 303-473-1389, email@example.com or twitter.com/jsspina24