As home buying cools, rental market heats up

DENVER – As Denver’s housing market cools following the rise of federal interest rates, the competition for finding a rental home in the Denver metro area is heating up.

For almost two months, Christopher Byard and his girlfriend have filled out more than 25 rental home applications in the Denver metro and have yet to find a rental home.

“The email reads, “You’re one of the top candidates being considered. We’re going back asking candidates to put their best offer forward,” Byard said, reading an email from a property management company. “I mean, I feel like this is what my friends go through in the bidding wars for buying houses.”

Byard says he’s found himself in a few bidding wars for rental homes over the past few weeks.

“I’m not passing judgment, but I’m shocked at somebody who would go like, “Oh, this is listed for $2,700 a month. I’ll offer you $3,000 a month,” Byard said. “Through a rental agency, we had viewed this one property. Ultimately, we didn’t get the property, and then they said they had another property that we might be interested in. But to fulfill the lease, we would have to pay the 12 month’s rent upfront, which is absolutely bonkers. That’s like, you know, $36,000.”

After mentioning his housing problems on his podcast, Stoned Appetit, Byard says he received dozens of responses from his listeners who have experienced similar rental home bidding wars in Denver’s housing market.

Rob Warnock, senior research associate at Apartment List, says the competitive rental market in Denver is similar to what’s happening in many large cities across the country.

“Really, the market conditions are giving a lot of leverage to landlords and property managers,” Warnock said. “There’s a lot of demand for apartments, a lot of very low vacancy rates, housing construction was impacted by the pandemic and has slowed the supply of new homes, especially apartments in major cities. All of this means that vacancies are becoming scarce compared to where they were before the pandemic.”

Warnock says typically buyer-friendly housing markets make home rentals more affordable.

“But we’re kind of seeing the opposite right now, with so many people stuck renting because that’s all that they can afford,” he said.

Warnock says there are a few things renters can do to compete in the market without offering to pay more money.

“There’s lease terms, like being able to rent for longer, that is favorable. So I would recommend looking at other parts of a lease that are negotiable,” he said.

“I’ve lived here for 12 years now and it’s never been this difficult to find a place,” Byard said.

Byard says he will view another property this week, and he’s hoping his home search will soon end.

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