Quick Market Update - Why is their no "Inventory" in the Denver housing market?

From Lon Welsh - one of the owners of YCRE:

"There are three reasons why we don’t have much inventory, and while we’ll continue to be short of inventory for the next 3-5 years:

•       Denver has historically grown by 50,000 people a year.  The Census Bureau expects that rate of growth to continue for at least another decade.  Denver metro will grow from 3.0 today to 3.5 million by 2025.

•       Millennials are the biggest generational group in Denver – 850,000 people!  Over 300,000 of them live with their parents and want their own place.  This is a huge segment of pent-up demand.  By comparison, we sell around 50,000 homes in Denver each year.

•       We need to add 11,000 rental units and 21,000 for-sale units each year to keep pace with all of this market demand.  In 2015, we’ll only add 8,000 rentals and sell 10,000 new homes.  Builders can’t even come close to keeping up.  Land is scarce, water is expensive, and there’s a skilled labor shortage.  Many building materials have gone up in price quite a bit, too.  The local governments that issue building permits are swamped.

As a result, the tight inventory for homes and rental properties will continue, even as interest rates increase.

•       Home prices will continue to increase above their historical rate of 6% per year. 

•       Rents will keep increasing faster than their historical 4% annual inflation."