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DENVER — As anyone in the market for a home in Denver can attest, houses are in short supply, which is leading to bidding wars, skyrocketing home prices and increasingly fewer rentals.
Rob Munson is experiencing the effects of that shortage. He found a note on the front door of his apartment Sunday stating the unit had been sold and was being turned into a condo.
The note also said his month-to-month lease would not be renewed and would expire May 31.
"It affects me, having to find a different place on such short notice," he said, "which with some help I've luckily done."
The 53-year old, who is still undergoing chemo for colon cancer, said the new place will cost him much more.
"I'll be paying 40% more for one bedroom," he said, noting he's paying just under $1,000 for his current two-bedroom apartment. "So a big jump in rent."
Munson, who helped landscape the grounds of the four-unit complex at 13th Avenue and Madison Street, is now getting ready to pack up everything. He said the big challenge is maintaining strength, working 50 hours a week and trying to line up help moving to a new apartment just as his cost of living is about to skyrocket.
"I understand the capitalist system and wanting to make a buck," he said, "but, at times, it seems a bit greedy."
More and more apartment owners are taking advantage of record high home prices and are selling their units as condos.
"I understand why it is a lucrative investment for an owner to take a multi-family building and split it into single condos," said Jim Shonts, the owner of PMI Elevation, a property management company and the communications chair and vice president of the National Association of Residential Property Managers in Denver.
"Some of the older landlords, who may have had the property for 30 years, don't usually keep up with rents. They have a personal relationship with some of their tenants, and as soon they sell, that personal relationship is severed."
Shonts said it will be difficult for tenants to find other housing at the same price. He said rents and home prices are skyrocketing because of a housing shortage. Shonts said more people are investing in real estate and are finding that it is a profitable investment.
"That's why I see a lot of my personal clients and their inventory being sold off this year," he said. "I'm personally losing about 15% of the properties I manage to home sales because the market is so good for them."
Shonts said losing 15% of his portfolio "could be an indication of the overall rental market going down about the same percentage."
When asked about the difference between continuing to rent out at record rental prices or selling their property as condos, Shonts said it's an easy decision for many owners.
"If they can get the highest price the neighborhood has ever seen, it's very difficult for them to pass on that," he said. "You can have a couple extra hundred dollars a month, or a couple extra hundred thousand dollars. They make the decision."
Shonts said he doesn't see that changing until there is a really large number of homes being built in the area to match demand.
"This is not a bubble," he said. "People are still moving to Denver. They love the area and everything we present here, but what you're not seeing is new housing being built at the same rate."
He also said lumber prices are about three times what they were a year ago, which makes constructing new homes even more expensive.
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Munson's new landlord said they're "doing everything by the book," and are happy to work with him on a move out date. Matt Stevens of Madison2 LLC said they'd prefer to sell the condo to Munson if he qualifies.
Munson said he's just trying to summon the strength to get everything together for the big move.
When asked whether his cancer treatment is wearing him out, Munson replied, "That is one thing you can't get past — the fatigue brought on by therapy and working and having to do other work now."
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