Rise in Pre Foreclosed Homes Results in Lower Apartment Vacancy- By: John Cutts
The increase in the number of pre foreclosed homes and foreclosure homes in Denver, Colorado, caused a lot of people to forego homeownership. Coupled with high unemployment rates, market analysts stated that most homebuyers do not consider these times as a good period for homeownership.
This has resulted in more people renting dwellings instead. Even with very affordable Denver foreclosure homes available, majority of Americans are reportedly wary of investing in homeownership right now. In Denver, the fourth quarter of 2010 recorded the lowest apartment vacancy rate for the said quarter since 2000. The fact that rents have risen in the metro area has also not deterred tenants, leading analysts to speculate on how worried people are when it comes to homeownership.
According to the Apartment Association of Metro Denver, vacancy rate was at 5.5% during October-December 2010, down by 28% from the 7.7% rate recorded in the 2009 fourth quarter. Even if the number of Colorado foreclosures rises further and prices of houses decline again, analysts expect the rental housing sector to remain strong for most of 2011.
The popularity of rental homes and apartments has also resulted in a number of owners of pre foreclosed homes to convert their properties into rental dwellings, local realtors have reported. The fourth quarter data on vacancy rate showed that a lot of would-be tenants are still out there seeking rental premises. They added that the level of vacancies among apartments during the quarter has not been seen in the metro area for almost 10 years.
Although rental rates are increasing as vacancy rates decline, a lot of people still prefer apartments over homeownership, even over cheap foreclosed homes. For the fourth quarter of 2010, rents jumped to $846 from the 2009 fourth quarter rate of $811. The figure represents a 7.5% increase. The area that posted the highest increase in rental rates during the three-month quarter was Adams County, which saw rental fees increasing to $857.
Majority of landlords are hoping that vacancy rates will remain low in most of the metro area's markets for the rest of the year. Even if purchases of pre foreclosed homes and other residential properties pick up, majority of apartment market analysts believe that the rest of the year will be good for landlords.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.