Colorado is a boom and bust town, so you’re buying more rentals…Right now?

by | Uncategorized

“Denver is in the midst of a massive supply wave of nearly 37,000 units delivered since 2012 alone. So far, strong job and population growth have resulted in good household formation rates to help absorb this supply.

However, while Denver’s job growth projection remains positive, it has slowed significantly.

At best it could produce demand for about 9,100 new multifamily units through 2019. With 16,800 units underway, this will likely produce a short-lived supply/demand imbalance over the next 12-18 months, with net absorption likely to take a hit.”

Fannie Mae – Multifamily Metro Outlook: Denver Winter 2018

(Yes, it’s painful to quote them, considering their starring role in the last real estate collapse...oh well)


Propaganda alert: Need a “safe” return, buy a rental?

I’m pulling all my money out of that “risky” stock market, and buying real estate. Rentals are the fastest way to financial independence. If I can “touch it,” and have “control,” it’s safer than the stock market.

Experts say Denver can’t be overbuilt because of labor shortages.

My beautiful friends (seriously, look around at any other airport, we look great), what could go wrong?


From 2008 to now, Denver, how much further can we go?

“By the end of 2017, nominal home prices in 59 of the nation’s 100 largest markets exceeded their pre-crisis peaks. Prices were furthest above peak in metros that experienced only a modest downturn after the crash and then a surge in appreciation, such as Denver (62 percent above peak), Austin (58 percent), Dallas (55 percent), and Houston (44 percent).”

– Joint Center for Housing Studies at Harvard University – The State of the Nation’s Housing 2018


Where will your kids live? Really?

Look around. Do you see many non-luxury style apartments going up?

What “Affordable” housing? How many units? 350? Like that’ll make a dent.

Ask your Lyft or Uber driver of choice, the streets are talking with da data: Millennials are starting to look else were after months of paycheck-to-paycheck living with sky-high rental rates.


Concentrated Colorado sectors that could never slow us down…

Oil & gas? Yes, Proposition 112 was defeated. Colorado is back to drilling, fracking, and extracting baby…

Oil is going to $100 a barrel.

Two. Years. Ago. in January 2016, oil was at $30 a barrel, ask people who work in oil and gas if they remember January 2016.
Do you?

Cannabis? A consolidation wave maybe? Could more mergers and acquisitions from alcohol and tobacco companies vying to protect frothy vice margins drive cannabis prices down?

Could other states legalizing cannabis for more tax revenue put our population migration in jeopardy?

Technology? Regulations would never fight the winner’s curse, and greater privacy regulations when people really figure out their attention is hacked for “free” services?

Healthcare? Finance? All bulletproof?


4th graders study Colorado’s historical boom and busts, but have the experts already forgotten them?

Furs…Metals…Oil…Real estate?

In the wild west, weather can change quickly. Maybe a little quicker than we think in local real estate deal rentals too.

Stay beautiful Colorado: sunny, with more sun. I own a rental too, and hope I’m wrong.

I’m sure there’s deals that make sense.

But!

Just because we are all beautiful people, don’t think every real estate deal is too.