The Denver Metro area is in the center of what experts are terming as a ‘rental crisis’. This is because of the rising cost of renting apartments in the area. A report that was released by Zillow demonstrates how deep the renters will have to dig further into their pockets each month to settle their rent. Denver is not the only area that is experiencing this rising cost of rents, the rest of the country is witnessing a sudden spike in apartments’ rents. In the Denver Metro-area , the average rent stands at $1,868 a month.
Across the country, the rents are rising at their quickest pace in 2 years, up an average of 3%. When compared to home values, the rents are growing at a faster rate in 20 out of 35 biggest metro areas in the country. Home values in Denver are up by 14.2 percent over the past year and now stands at $294,100. This represents the largest increase in the entire country. Experts have projected that the pace at which the value of the homes is growing is expected to drop in the coming year. However, this will not be the case for the renters, which is expected to rise even higher.
Zillow Chief Economist, Stan Humphries notes that there are numerous incentives that encourage investors into owning homes. The low-interest rates, the ease of acquiring a mortgage and the values of homes remaining below prior peaks are a few incentives that are attracting more and more investors into the real estate sector in the country. Experts point out that it will become increasingly hard for majority of the renters to get the benefits that come with owning property. This is because of the country’s expanding rental affordability crisis that is continuing to worsen each passing day.
Local property management companies explain that, the more the funds going to rent, the less the funds remaining for savings for down payments and other additional costs. This keeps the renters renting for longer periods and serving the growing demand. This vicious cycle will be tasking to abandon and is an indication of the discrepancies that still exist in the housing sector. Raising of wages and construction of new homes will help a lot with the situation, but the two are not coming very quickly.
Darrell Schmidt, a developer, is launching an 81-unit project of Class-An apartments. The apartments will be located in a place that renters would love to live, as they will be located ten minutes west of downtown on Tennyson Street. Schmidt acknowledges that the quick growth experienced in Denver metro area is because the investors are offering the customers with what they really want. Denver now outranks hip places such as Austin and Portland on where the Millennial Generation wants to be. The area has features that the younger adults desire: high standings for fitness and health consciousness, as a place to venture into business, and as ‘socially-networked’ area. A study that was carried by Brookings ranked the city as the Number 1 city that is preferred by ‘young, cool, hip individuals’.
Resources:
Mavi Unlimited Property Management
777 South Wadsworth Boulevard
Lakewood, CO 80226
(303) 665-8944
Real Property Management Colorado
9725 E Hampden Ave #101
Denver, CO 80231
(303) 327-5650
Denver Realty Group
8400 E Crescent Pkwy #600
Greenwood Village, CO 80111
(303) 502-7333