Hot market for home rentals

As fast as apartment units are filling up across the region, so are single-family homes for rent, especially in Greeley, where more foreclosures hit the market in the recession and where oil and gas workers have been swarming in.

Property managers in Greeley say they can’t answer their phone fast enough to keep up with the demand for single-family homes, and landlords are charging more for rent as vacancy rates drop.

Jana Pickett of Scott Realty, who manages 243 properties, said that most of the properties she markets are taken within days, and that some renters are so desperate for a place to live that they agree to rent the property sight unseen.

“There are more people than properties,” Pickett said. “I’m overwhelmed with calls.”

Of course, more demand leads to higher prices, so rents have gone up anywhere between 10 and 30 percent, depending on the location of the property, Pickett said. As little as eight months ago, average rent for a single-family home in Greeley was just over $1,000, but now that number is closer to $1,400.

Most renters, however, are “desperate” enough that they’ll pay the rent, Pickett said. The influx of oil and gas workers and their families, as well as employees of Greeley’s Leprino cheese plant, have created quite a bit of strain in the market, though Pickett thinks the trend can also be attributed to the overall condition of the housing market.

Weld County experienced many more foreclosures than Larimer County during the downturn and in the following months. Weld’s foreclosure rate has consistently been at least double that of Larimer for years. The rate stood at 6.98 percent in January of 2010 in Weld County while Larimer’s rate was 3.47.

Even now, as foreclosure rates slowly improve every month, Weld’s foreclosure rate in February was 1.69 percent while Larimer’s was 0.85 percent. Ninety-day delinquency rates in Greeley are also typically higher than those in Fort Collins or Loveland, at 4.66 percent and 2.45 percent respectively in February. Higher delinquency rates suggest that foreclosures will continue as the economy crawls out of its recession.

Families whose homes went into foreclosure are now seeking to rent single-family space, according to Ryan McMaken of the Colorado Division of Housing.

Once they have lived in a single-family space, McMaken said, most homeowners who have been foreclosed upon are reluctant to downsize to a smaller apartment, even though apartments are considerably cheaper.

“They’ll do what they have to do to get into a single-family situation,” McMaken said.

Three-bedroom apartments, most comparable in size to a single-family home, are harder to come by in Greeley, with only 9.7 percent of the multi-family units there offering three or more bedrooms, according to data from the Division of Housing. Average rent for a three-bedroom apartment in Greeley was $819 per month as of the first quarter of 2012, nearly half the cost of renting a single-family home.

Families that are unable to obtain financing for one reason or another are also likely renters, and are becoming more common as loans become harder to come by.

It also is in the culture of Coloradans to prefer single-family living over multi-family, McMaken said. Generally speaking, in Colorado, single-family vacancies are always lower than multi-family.

The Division of Housing compiles vacancy statistics for single-family homes in the metro Denver area only, McMaken said. However, as a general rule, single-family rates are typically half of those for multi-family complexes.

As of the first quarter, the multi-family vacancy rate in Greeley was 5.8 percent, theoretically putting the single-family rate at 2.9 percent.

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Molly Armbrister covers real estate, banking and health care for the Northern Colorado Business Report. She can be reached at 970-232-3139, marmbrister@ncbr.com or twitter.com/MArmbristerNCBR
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