Steamboat Springs An unusual number of condominiums and other rental properties in Steamboat Springs are empty right now, a fact that could lower the average market price for long-terms rental properties, local rental property managers say.
There are several reasons for the downturn in the rental market, the economy being chief among them. With Steamboat Springs being an expensive place to live, some people have opted to move elsewhere, said Jim Funk, owner of Steamboat Home Management and Realty.
While some condos remain for sale for more than a year, Funk said by the time ski season is here, some of those condominiums will be rented out.
"These people want returns on their investments, and putting more condos up for rent will eventually bring down the rental rates," Funk said.
Nick Metzler, a Realtor from Colorado Group Realty, said construction of new condos and rental properties will also lower the average market price for long-term rentals.
Funk said the prices for his long-term rental properties range from one-bedroom spaces at Walton Village for $700 per month to larger homes for $2,000 to $3,000 per month, but all those prices could fall if the economy continues to struggle and people continue to take advantage of low interest rates and opt to buy instead of rent.
"Our phones are ringing, but not like a normal-type season," said Funk, whose properties are at 90 percent occupancy. "Usually, we have three or four different parties looking at a place but now we're glad to have one."
Natalie Simmins, an administrative assistant at Big Country Resorts, said about half of the company's 65 long-term rentals are empty, "probably, the most we've ever had."
She also said the economy and low interest rates are hurting the rental market.
Local mortgage brokers agree.
Steve Novack, of Steamboat Home Mortgage, said the low interest rates have tremendously boosted the amount of home purchases in the past year.
Tom Ernst, a mortgage broker and owner of Catamount Financial, pointed to two other factors that are encouraging more people to buy instead of rent: loan companies offering 100-percent financing, and loan companies being more lenient with home buyers using cash reserves.
But not all rental properties are suffering this summer.
Mountain Castles president and broker Fred Luhm said his company is "doing exceedingly well."
He said by increasing advertising, renovating and upgrading properties, building new properties and making changes within the company, long-term rental occupancy is up significantly, up to "99.9 percent." Long-term rentals make up 25 percent of Mountain Castles' business, he said.
Overall rental occupancy levels are expected to rise as ski season approaches, Funk said, which is typical. Many vacancies, both short- and long-term, will fill, but if Steamboat continues the recent trend in the off-season, prices could very well fall, he said.
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