Renting? Expect to Pay More

Does it seem to you like nearly everything is costing more these days? Go to the grocery store…pay more, fill up your car…pay more, renew your lease…pay more. According to the Colorado Division of Housing and the Apartment Association of Metro Denver, apartment vacancy rate in Boulder and Broomfield counties is down to 4.6% with an average monthly rent of $1,106.15, as compared to $995.07 a year ago. For a one year lease, that's an extra $252.96!

Obviously supply and demand play a huge factor in determining prices. With Boulder especially having such a low inventory of rentals, monthly rents are going to rise. While there is some inventory being added, such as the Two Nine North development at 30th and Walnut with 238 units, it is not significant enough to drive down rental prices. Historically Boulder has had a tight rental market and until more developers add inventory - which won't happen overnight - rents will continue to go up. 

Interestingly, the National Association of Realtors just released a report that seven out of 10 renters do aspire to be homeowners, saying it is a top priority for their future. Of those surveyed, 72% agreed that buying a home is a good financial decision while almost two-thirds said now is a good time to purchase a home. Since monthly rental payments build someone else's equity, consider the long-term savings homeownership affords. And, your monthly payment could be less than rent!

Is RealtyTrac for Real?

All of my buyer clients want a great deal. I can't blame them, and I work my hardest to get them a fair price. Like most people, my clients look online for properties and often in the beginning insist on buying a foreclosure or short sale to save oodles of money. Unfortunately the Internet, like TV, can be a bit misleading.

I'd say one out of every two buyer clients tells me something like this early in the process..."I was looking online and saw a $400,000 house for just $40,000. When can we go see it?" This is usually the part where I ask, "Were you looking on RealtyTrac?" and they answer with a surprised "yes".

While RealtyTrac.com may be good for reporting foreclosure data, the main issue I have with them is that a listed "sales price" is really just a defaulted loan amount or a lien. Most of these homes aren't even for sale! I have spoken with homeowners while helping them keep their homes and it's a shame that as soon as they fall behind on their mortgage there are people driving by their home, scoping out the "deal of a lifetime". It's stressful enough being behind on a mortgage and I'm sure you can imagine the additional stress this adds to the situation. How many of us know someone who has been down on their luck but is working with their lender to set up a plan to keep their home, only to have RealtyTrac mislead the public that they're ready to sell for a rock bottom price? To me this is an ethical issue but they're in the business of making money and charge a monthly membership of up to $49.Ironically, most of this information can be provided by a realtor at no charge. And, a realtor often ends up listing those homes that do become foreclosed because the bank hires them to do so. Using an agent costs you nothing and will end up saving you time and aggravation so it just makes sense to have a realtor on your side. 

Zillow's Zestimates Yield Different Results

Last month, Zillow changed it's algorithm to calculate Zestimates. The result is more accurate information, but not necessarily happier homeowners. According to Zillow, the previous national median error was 12.7 percent,  but that has now been reduced to 8.5 percent. Metro Denver was even cited as being one of the biggest gainers in accuracy. While this is good news for those consumers who use Zillow it has poised a dilemma for some homeowners who either feel their home is undervalued or legitimately are part of the "8.5 percent error." Though Zillow can't take the place of the abundant historical data found in the Multiple Listing Service, many consumers don't know otherwise and consider Zillow to be totally accurate. Fortunately the Boulder area results I searched all seemed close to accurate, but not all parts of the state or nation are as lucky. You can read Zillow's article, "Upgrading the Zestimate."