According to housing market analysts in Colorado, the huge number of foreclosure short sales and high levels of distressed properties in the state are part of the reason for the increased number of people opting to rent houses. In some areas of the state, vacancy rates in rental housing have gone down considerably in the 2010 third quarter.
The supply of Denver distressed homes and foreclosed properties in various local markets had escalated during the past three quarters of 2010, analysts have reported. In areas like Greeley and Fort Collins-Loveland, these high numbers of distressed and foreclosed homes have resulted in more people forsaking home ownership and opting for a rental dwelling instead.
As the number of Colorado distressed homes for sale rises, vacancy rates decline. In Greeley, third quarter vacancy rate has gone down to 3.9%, making the July-September 2010 period the quarter with the lowest rental housing vacancy level since the 2001 third quarter. In Fort Collins-Loveland, the rate of rental housing vacancy was pegged at 2.9% for the third quarter, giving the region the top ranking in the whole state in terms of lowest vacancy rates.
Housing industry experts stated that the shrinking vacancy rates are due to the high number of foreclosure short sales and distressed properties. They stated that potential buyers are also finding it hard to get loans so it makes it more difficult for them to purchase properties, thereby forcing them to turn their backs on homeownership and choose renting instead.
Although continuous increase in distressed real estate homes has been identified as a primary reason, analysts are also pointing to the arrival of university students as a contributing factor in the increased number of renters and the decreased rate of rental property vacancies. Meanwhile, the statewide vacancy rate was pegged at 5.5% for the 2010 third quarter. Analysts are predicting that with vacancies at their lowest levels since 2001 in most areas, rental rates will likely increase from now until the first half of 2011.
Despite the predicted hike in rental fees, industry analysts believe that more people will enter the rental housing market. They stated that majority of residents are unlikely to take a risk on homeownership, not while the market has an oversupply of foreclosure short sales and distressed homes.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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