During the Great Recession, when interest rates and home prices were rock-bottom, Mike looked at dozens of homes, but failed to buy, worried he would be stuck with a home that would continue to drop in value. Fast forward to April 2014. Mike is still renting. He considered moving to a new apartment community along Denver’s southeast corridor. He found one with a one-car garage for $1,420 a month. He called back three weeks later and the price was $1,750, a 23.3 percent jump.

 

Last year, overall apartment rents rose by 8.9 percent, just about the same as home prices in the Denver area. How is it possible that Mike would see almost three times that increase in only three weeks? The answer is that renting an apartment is like buying a plane ticket.

 

Increasingly, big apartment owners use software to match the price of units based on what is available and what the market will bear. Supply and demand is down to a science and is much more efficient than with the housing market. In effect, during the past five years, Mike has been paying off his landlord’s mortgage instead of his own. Given rising rents, he decided to give home buying another shot. It was an eye-opener when he learned first-hand that reports of the housing shortage were not exaggerated.

 

Yet, there is a silver lining for Mike and other renters who would be better off buying: they don’t have to worry about the complicated juggling act of buying and selling a home at the same time. Renters, however, shouldn’t try to buy a home on their own. With so little inventory, more than ever they need an experienced Realtor to help them map a strategy and navigate this market, where demand far outstrips supply.

 

Mike has learned his lesson.

“I’m kicking myself,” for not buying, he said.