Housing languishing on the market as employment slumps
December 6, 2009
Steamboat Springs — Mary Weiss didn't have to think too long about what to give her tenants for a holiday gift this month.
"We have 50-plus tenants, most in one-bedroom units, and we gave them all a $25 gift certificate off their rent," Weiss said.
Weiss is the owner of Central Park Management. When you count properties her company manages for other owners, the staff oversees 160 rental units.
She said the local market for rental housing has changed significantly in the past year and that when it came, the change was abrupt.
"It was quick," Weiss said. "Right in the middle of ski season, people were getting their hours cut, and they were splitting up (rent) payments" to get through the month. "You knew you had to be proactive and you were going to have to help people out."
Reall Colvenson, property manager for Central Park Management, engaged the company's tenants and worked to keep them in place, Weiss said.
"She has done a fabulous job of negotiating with owners and tenants and getting rents realistic in terms of the market right now," she said.
The rental market is different than at any time in the past 20 years when it was primarily a landlord's market as seasonal resort workers and college students competed for housing. Gone are the days when savvy apartment hunters learned that they could get an advance peek at the newspaper's classified ads by staking out the recycling Dumpster outside the pressroom.
Thursday's edition of the Steamboat Today contained classifieds offering 33 apartments for rent, 44 condos for rent, 30 single-family homes for rent and a few duplexes and townhomes, all at monthly rates discounted from 2007 and 2008.
Weiss is representing an unfurnished three-bedroom home on behalf of a client. At $1,500 a month, it includes all utilities — cable television in addition to electric, heat and water. Two years ago, the home likely would have rented for $1,600 to $1,700, she said.
Another example is a four-bedroom, three-bath townhome with a heated two-car garage at Saddle Creek advertised for $1,600 this week.
For landlords, Weiss said, the appropriate question is, "Do you want renters to pay part of your mortgage or none of it?"
Realtor Brian Ladd, of Ski Town Real Estate, brings a dual
perspective to his single-family rental home on the city's southern edge. The home at River Place also is for sale, but he'll take it off the market for a tenant with good references.
Ladd says the three-bedroom, 2.5-bath house is among the lowest priced, if not the lowest-priced single-family home in the mountain area at $440,000. The monthly rent of $1,450 also is a relative value, he said.
Ladd said he and a partner bought the home as a long-term investment.
"We never intended it as a quick turn-around," Ladd said. "We don't have to sell it, by any means. My thinking at the time was that we're not going to get a big supply of single-family homes at the mountain any time soon. And I think that's still the case."
He said River Place is a family neighborhood where everyone's children play together and adults socialize on the front porches on summer evenings. One of its strong points is a two-story community house with a children's playroom, game tables, couches and a group kitchen on the main level. The second story includes a modest exercise room and three guest rooms that make welcoming house guests much more feasible at River Place.
His last two sets of tenants at the River Place home, Ladd said, were families with young children who succeeded in moving up in the market by buying and building. Now, he's willing to rent for less than he had previously.
"I rented it for the last tenant for $1,750," Ladd said. "I've dropped it to $1,450, and I'm starting to get some people interested, but I'm not willing to rent it for the winter only."
Weiss said she thinks the weakening of the seasonal employment market is contributing to the difficulty landlords are having renting their properties.
"There's just not a job market for young people this winter," she said.
Ladd said he thinks the winding down of large construction projects such as One Steamboat Place and Edgemont is inevitably eroding the bullish rental market from earlier this decade.
"There are definitely young families in Steamboat who are finding opportunity to buy a home with the reduced prices right now," Ladd said. "But I also have friends who weighed the cost of housing against long-term employment opportunities and decided to retreat back to Denver."