Renters seeking housing in Fort Collins, Loveland, Greeley and surrounding areas in Northern Colorado are struggling to find a home, and it's seemingly getting more difficult every day. Take Me Home Real Estate, LLC of Northern Colorado recently listed a residential rental property and received over 100 calls on that home alone. A majority of the clients expressed an extreme frustration in the lack of availability. One client said, "I've been looking for a home for over a month now, and every time I call an owner to get more information, they tell me it's already rented out. I so tired of this. I just want to find a safe place to live!"
The absolute irony in this situation of rental housing shortage is the overwhelming amount of vacant homes on the market for sale in Northern Colorado. Of the approximately 5,000 active listings in Larimer and Weld Counties, 38% of those homes are vacant. The average days on the market for the active listings is 160 days, however, many of the properties have been for sale over 12 months. The homes ranging in price from $80,000 - $150,000 are selling (it's all about affordability). But, when buyers are unable to attain financing in a market where lenders are simply not lending, those buyers are choosing to rent until it makes sense and is feasible for them to purchase.
Another very interesting fact is most of the renters seeking housing today have ample income to pay for rents ranging from $1200-$2000. That amount is equivalent to a buyer, for example, paying a mortgage on a $350,000 home with 10% down and an interest rate of 5%. The lack of funds for a down payment is the biggest factor for potential buyers choosing to rent. They are essentially buying time until they can afford to buy again or can qualify for a loan after repairing their credit or establishing a new job.
Regarding new construction in Northern Colorado, back in 2005 when the market was at it's peak, 30% of homes sold in the first quarter were new homes and the median sale price was $216,000. Fast forward to 2011...only 9% of the homes sold in the first quarter were new construction and believe it or not, the median sale price INCREASED to $220,000. With a vacancy rate of current inventory at 38%, builders should take caution when pricing their homes if they are taking the risk of building in this economic climate. If they have vacant inventory that has not sold, even if the property is priced over $350,000, they should put serious consideration into leasing the property to recover some of their loss. The renters are out there and they can help you receive income until the market improves.
Builders and Sellers alike have an incredible opportunity to offer temporary housing to people in need and generate income until the market improves. Everyone wins.
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(Housing statistics compiled by Lori Jarrett, Broker/Owner of Take Me Home Real Estate, LLC from IRES (Information and Real Estate Services). Information deemed reliable, but not guaranteed)
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