Thursday, May 21, 2009

Apartment vacancies rise across Colorado

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The Colorado statewide apartment vacancy rate for 2009's first quarter increased to 8.5 percent, rising from 2008's first quarter rate of 6.1 percent. According to a report released Thursday by the Department of Local Affairs' Division of Housing, eighteen of the twenty-two areas surveyed reported increases in vacancy compared to the first quarter of 2008.

The four areas that reported falling vacancies were Fort Collins, "Southeastern Colorado." Steamboat Springs, and Summit County. With the exception of Fort Collins, all metropolitan areas of the state reported increasing vacancies including Colorado Springs, Loveland, Grand Junction, Greeley and Pueblo. The Denver metro area, measured in a separate survey released earlier this quarter, reported increases in vacancies as well.

On the Front Range, Colorado Springs reported the highest vacancy rate of 11.7 percent compared to 9.0 percent a year earlier. Vacancy rates in Colorado Springs have generally hovered between 9 percent and 12 percent since 2003.

Pueblo's vacancy rate rose year over year from 6 percent to 7.4 percent, while vacancies in Greeley rose from 7.3 percent to 8.4 percent. The increase in vacancies in Loveland was relatively small where vacancies rose from 5.6 percent to 6.1 percent. Denver metro vacancies, measured in a separate survey, rose from 5.9 percent to 8.5 percent during the same period.

In the central mountains, results were mixed with Alamosa and Buena Vista reporting unusually high vacancy rates of 12.9 percent and 16.7 percent respectively. Glenwood Springs, Eagle County, and Summit County on the other hand, all continued trends of low vacancy rates with rates of 1.5 percent, 2.1 percent, and 2.7 percent respectively.

In general, a vacancy rate of 5 percent is considered an "equilibrium rate." A rate of 3 percent or less signals a tight market.

"This is a trend throughout the state," said Gordon Von Stroh, professor of Business at the University of Denver, and the report's author. "In recent years, only certain areas of the Front Range have seen notable increases in vacancies, but we're experiencing a more general rise now."

Average rent levels were mixed throughout the state. Fort Collins led the state in rent increases as average rents rose from $760.21 during the first quarter of last year to $860.81 during first quarter of this year. Grand Junction also reported significant growth in rents as average rents increased from $648.57 to $680.35 year over year.

Average rents were largely flat or fell in Alamosa, Aspen, Canon city, Colorado Springs, Loveland, Ft. Morgan/Brush, Montrose, Pueblo, Salida, Sterling, and Summit County.

The Vacancy and Rent Surveys are a service provided by the Colorado Division of Housing to renters and the multi-family housing industry on a quarterly basis. The Colorado Vacancy and Rent Survey reports averages and, as a result, there are often differences in rental and vacancy rates by size, location, age of building, and apartment type. The Report is available online at the Division of Housing web site.

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