Increases in Rents Seen

Posted at 3:38 PM, Jan. 24, 2007

Something that will make property owners smile - rents are expected to rise in 2007!

Something that will make residents frown - rents are expected to rise in 2007!

It's amazing how one item can make two different groups feel so differently.

In 2007 apartment rents are expected to rise by 19 percent with incentives going away.  Some of these incentives have included free rent, airline tickets, and more.  Why is this happening?

The Denver metro area is seeing more people moving in from California and other areas where the cost of living is higher or where the job outlook is bleak.  With that, residents will come and investors will follow or even will lead taking a risk that the market will get better.  Apartment investors took a risk of $2 billion dollars in 2006 buying apartments when usually only $700 million is spent.

Residents - here is something to smile about.  Today investors are paying over $94,000 per unit compared to over $37,000 in 1996, an increase of 151% while the average rent has only increased 40% during the same time from $607 to $850.  If you are looking at single family homes, the average purchase price for the same time frame has increased 86% from over $133,000 to over $247,500.

To read more about increases in rent, visit the Denver Post's Business Section of January 24, 2007.