The ranch house in Louisville that Emily Teater and her family of five rented before the Marshall fire wasn’t their dream home, but it was solid, had a big yard, and best of all, it didn’t. has not been destroyed by fire, smoke or wind. .
It was one of the few surviving houses on their street, although it had to be cleaned from top to bottom due to ash and soot. They considered moving because the family felt sad every time they passed their neighbours’ burnt houses. Yet they decided to stay.
“We couldn’t find another rental,” Teater said. “They were going too fast and they are expensive. But we have a solid house and we can clean it. Let’s stay in the area and deal with the sadness.
Then last week the family’s landlord, with little explanation, sent a notice to terminate their lease when it expired in March. The owner gave them the option of paying monthly with a 10% increase until May.
“We were shocked,” Teater said. “We were absolutely shocked.”
Now, the Teater family will join the hundreds of other families looking for homes in an area where the market was already tight before the Marshall Fire destroyed 1,084 homes and damaged 149 others in Louisville, Superior and parts of unincorporated Boulder County on Dec. 30.
It’s too early to tell how much the Marshall Fire has impacted housing costs, as less than a month has passed since the 6,000-acre wildfire destroyed 6,000 acres, but those looking housing say it’s more expensive than ever.
The most recent data shows vacancy rates rose slightly for Metro Denver overall to 4.3% in the final quarter of 2021 from 3.8% in the previous quarter, according to the Metro Apartment Association. from Denver. But that’s typical for the last three months of the year, and that 3.8% was the tightest rental market the metro area has seen, said Drew Hamrick, senior vice president of government affairs at the association.
Already, rents in the metro area averaged $1,873 per month, up 14.8% from a year ago, according to data from Zillow. Add more than 1,000 new families looking for homes, and those averages will increase, experts said. Many of these families were landlords who have now returned – at least temporarily – to the rental market.
“If there’s not enough vacant rent, rents are going to go up because that’s what the market is going to do,” Hamrick said.
Anecdotally, the market is charging even higher prices for available housing, said Amanda DiVito Parle, realtor at Re/Max and co-creator of a Marshall Fire Housing Needs and Availability Facebook page.
She recently listed a four-bedroom, four-bathroom Arvada home for $850,000. She had 38 showings and five offers, and sellers eventually sold her for $55,000 above the Marshall fire victims’ asking price, she said.
And this week, she noticed a real estate listing for a burnt lot in the Upper Sagamore neighborhood priced at $350,000. And that’s before fire debris was cleared from a housing estate that was completely destroyed.
“Inventory is remarkably low and prices are rising,” DiVito Parle said. “And everything near the fire will increase due to scarcity.”
After the fire, the apartment association identified more than 2,000 rental units available in the Denver area, Hamrick said. The rental market has rooms for fire victims, but that means many families will have to travel far from Superior and Louisville to find affordable homes.
“We assume some people will just have to commute,” he said.
But families want to stay close to their work, children’s schools and social circles.
The Teaters wanted to stay in their rental home for several reasons. They want their children to go to the same school and play on the same sports teams. Adults value their social circle. And the rental had a garden shed that made the perfect studio for Teater’s photography business.
“We hope there will be options, but we’re also terrified of what will happen if we put five people in an apartment,” Teater said. “I don’t want to move every year. That’s what we were trying to avoid.
“It’s part of the American dream to build a life around your small community. I just hope things will work out. I’m afraid this area is starting to impose prices on families like us. We are very intermediate people and if this region loses that, it would be terrible to see what happens to this community.
Things can get worse before they get better.
On Thursday, Colorado Attorney General Phil Weiser warned rental companies that his office would monitor price increases related to the fire. He sent letters to Airbnb, Zillow, Vrbo and REColorado after receiving an unknown number of reports from landlords who excessively raised rent after the fire. He asked these website hosting companies to apply fair practices to those who use their platforms to post job vacancies.
Distinguishing price gouging from fair market value can be tricky.
Colorado law prohibits price gouging during a crisis such as a wildfire or flood, but there is no formula for determining what it is.
Instead, attorney general staff will need to determine the difference between landlords taking advantage of vulnerable people and what is expected when demand outstrips supply. His staff will monitor current market averages and look for people who charge significantly more than everyone else, he said.
“We need to look at market conditions at the time so we can determine if the seller is acting abusively to take advantage of someone,” Weiser said. “When someone decides I can take advantage of you here and now and charge you a price way out of the market that takes advantage of a vulnerable person.”
DiVito Parle expects average rental prices to at least triple in Boulder County, based on what happened in Grand County after the 2020 East Troublesome fire.
“This is what free markets look like when you have 1,000 homes destroyed and 1,000 families displaced,” she said.