Rental investment study knocks GJ
Grand Junction’s bottom-of-the-barrel ranking for investors seeking long-term rental-property investments might not be a boon to the Grand Valley economy — but some say it could be.
Zillow.com, which analyzes real estate-industry data, listed Grand Junction as No. 95 of 95 metropolitan areas it studied as potential markets for investors looking for long-term rental income.
“It’s a list created for landlords,” not owners of their own homes wondering about their investment, said Zillow spokeswoman Katie Curnutte.
Even if it’s not a lot of help in terms of economic forecasting for homeowners, the Zillow report might contain some fertile soil, said Bob Reece, president of Advanced Title Co. in Grand Junction, which issues quarterly analyses of Grand Valley real estate conditions.
Grand Junction has been perceived as a “bargain market” before and profited from it, Reece said. “Right now from an economic-development standpoint, we have plenty of labor, some of it very good labor, and land is underpriced, so Ann Driggers probably has a lot to sell right now and I hope she is.”
Driggers is the president of the Grand Junction Economic Partnership, which was established to attract business to the Grand Valley. She was unavailable for comment on Monday.
Among the factors taken into account by Zillow was the foreclosure rate, Curnutte said.
“I think the state is a year behind what’s actually happening in the valley,” Robert Shuman of Shuman Peterson Appraisals said.
“Now we’re getting the vacancy rate down again,” Shuman said. “We’re starting to see investors buying foreclosed houses and renting them out” to people who have lost their homes to foreclosure.
Though the values of rental properties might have fallen 15 to 20 percent in the Grand Valley, they still might not seem attractive to investors who were considering properties in other areas, such as Denver, where drops in value were even more precipitous, Shuman said.
However the statistic might be treated, Grand Junction Area Chamber of Commerce President Diane Schwenke said “it threw up a red flag immediately” when she noted that Boulder was rated little better than Grand Junction, at No. 93. Pueblo also was in the bottom 10, No. 86.
“You have to wonder what the data points are,” Schwenke said, noting that only about one third of the nation’s metro areas were ranked.
Still, “being on a list like this could cause heartburn in terms of image and outside investment,” Schwenke said.
In addition to looking at foreclosure rates, Zillow looked at home-value appreciation rates and other indicators to draw up its list, Curnutte said.
The Merced, Calif., market was listed as the best place to invest in rental real estate for the long term.