An article published in the Denver Post this weekend reports that the current lack of Denver housing which is causing rental rates and house prices to soar could peak this year. However, a study sponsored by Housing Colorado and the Colorado Health Foundation states that the problem may take more than a decade to rectify itself. Some of the contributing factors that affect the rental property management Colorado companies are looked at here.
There is still a lingering builder reticence that developed after the housing crash of 2008. Cheap credit resulted in an oversupply of housing that caused vacancy rates to rise, house prices to drop and ultimately caused a tsunami of foreclosures. The financial crisis affected construction and its related industries the hardest, leading to waves of bankruptcies and lowered sector confidence . As the industry rebuilt itself, higher margin properties became more attractive for builders resulting in a shortage of lower income housing. Although there’s an upswing in builder confidence and construction rates, the deficit is not going to be reversed overnight.
Despite a lot of vacant land surrounding the metro Denver region, the amount that is actually zoned for residential use is quite small. As it stands, the amount of land available for residential construction is so low that it’s deemed unattractive to out of state builders looking for new markets to develop. Add to that fact that some communities such as Lakewood are working to limit housing growth in a bid to align infrastructure needs with community expansion.
According to the creators of a report sponsored by Housing Colorado and the Colorado Health Foundation, the current deficit of the region’s housing, which began in 2014, will continue to cause prices to rise for some years to come. The report forecasts that the housing deficit will will still affect the area as late as 2025. However, there could be many factors that could modify this forecast including a change in migration patterns, another recession or an acceleration of unaffordability in the area.
If you own property and are trying to make sense of the factors affecting growth in the area, seeking help from rental property management Colorado teams such as Woodruff can allow you to create a secure plan for the future. For more information, get in touch with one of our representatives today.