The real estate bubble. We all know that once it burst, people flocked to rent when they could no longer afford their underwater homes. Denver wasn’t spared this problem and because there was such demand, rents rose. As the market has corrected and improved, people are slowly going back to buying homes, so does that mean that Denver is finally at the top of rental prices? Possibly.
Supply and demand
The basic economics of supply and demand tend to control rental markets, with some wiggle room for other factors. As was the case when the real estate bubble burst, demand for rentals rose quickly. As the demand grew so did the rents. However, realistically, we know that as demand wanes, rents won’t go down as quickly, though they may come down some.
What will make a difference in the rental markets is local income averages. Let’s face it, if people’s income isn’t high enough to make it feasible for them to rent a home or apartment, they move back in with mom and dad. That means that empty apartments or homes stay empty. Landlords are in the rental business to make money and if they see that their properties are more empty than rented, they will eventually drop the monthly rents to a level that will be more affordable.
People are buying again
It seems that this is what is happening in Denver. The housing market has heated up and more people are buying again. That means less are looking for places to rent and/or are leaving their rental for their own home. Landlords, if they haven’t already done so, will adjust rents accordingly to reflect a lower monthly cost. That means that Denver has probably topped out in rental prices.
So if you’re looking to rent as opposed to buying in the Denver area, this is good news for you!