WHY INVEST NOW
If you read the papers or listen to the media, what do you hear? Record foreclosures and a slowdown in Home Sales have created a “buyers market” in Denver, Colorado.
Fundamental economic indicators, such as low unemployment rates and homeowners displaced by foreclosure, tell us there will be growing demand for rental property. As jobs increase, more people move to Colorado. This creates increased demand for housing. The investor owning rental property, historically benefits from this demand.
By purchasing Real Estate near the bottom of the cycle, investors stand to enjoy greater cash flow now and will position themselves for appreciation when the market rebounds.
Visit the RealView Opportunity offices, located in the Denver Tech Center, to share our experience in real estate investing and discuss some key market factors: Appreciation; Foreclosures; Affordability; Supply and Demand; and the Rental Market.
FORECLOSURES
There is a window of opportunity to buy homes in 2008
Foreclosures have risen steadily from a low point in the late 1990‘s up to record numbers in 2007 and 2008.
We anticipate foreclosures to peak in 2008 and then decline as the market improves moving forward.
These recent record foreclosures have added to the demand for single family rentals as former home owners are forced into the rental market.
SUPPLY
Record foreclosures will supplement the supply of homes on the market, create more tenants and put further pressure on rent increases.
Despite the record number of foreclosures, the supply of existing homes on the market is currently well balanced at 6 months.
Supply below that creates upward pressure on prices.
There are restrictions on future housing supply due to a construction slow down and an increase in construction costs. Inflation has caused construction costs to increase by 35% in the last 2 years.
Builders have nearly abandoned the market – decreasing available supply.
RENTAL MARKET
Lowest vacancy rate in a decade (3%) is causing rapid rent increases.
Expect 5-15 percent per year rent increases for the next 3 years and possibly beyond as vacancy rates stay low.
The implosion of the sub-prime and near-prime mortgage markets will force more people to rent than buy.
Price and rents are producing a better investment profile.