Apartment vacancies jump across Colorado
Colorado Springs the only metro area with falling rates
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The Colorado statewide apartment vacancy rate for 2009’s second quarter increased to 9.1 percent, rising from 2008’s second quarter rate of 6.7 percent. According to a report released Tuesday by the Department of Local Affairs’ Division of Housing, all metropolitan areas of the state other than Colorado Springs reported increases in vacancy compared to the same period last year.
On the Front Range, Fort Collins and Colorado Springs reported the highest vacancies at 9.9 and 9.8 percent respectively. The lowest metropolitan vacancy rate was found in Grand Junction where the rate was 4.5 percent.
In general, a vacancy rate of 5 percent is considered to be the “equilibrium rate.”
“The economy continues to dampen demand for multifamily rentals statewide,” said Gordon Von Stroh, professor of business at the University of Denver, and the report author. “An increase in troops moving to Colorado Springs is keeping rates down there, but most other areas saw increases of two to three percentage points.”
Comparing year over year, the vacancy rate in Colorado Springs during the second quarter fell to 9.8 percent from 10.2 percent, but Greeley’s vacancy rate climbed from 6.1 percent to 9.1 percent. Pueblo’s rate rose from 6.4 percent to 8.5 percent, and in Grand Junction, where vacancies hit a record low of 1.6 percent last year, the rate rebounded to 4.5 percent during the second quarter of this year.
Nevertheless, while vacancy rates have climbed quickly, they have yet to return to the 10 percent to 12 percent rates commonly seen from 2003 to 2005.
As expected, the survey showed little rent growth in metropolitan areas of the state.
“There’s been remarkably little rent growth in Colorado for two to three years,” said Ryan McMaken, a researcher with the Colorado Division of Housing. “With the exception of Loveland, those areas that have seen rent growth since the second quarter of last year are up by about five to ten dollars. All other areas saw falling rents.”
The largest increase in average rent was found in Loveland where average rents increased from $853.75 during the second quarter of 2008, to $870.63 during the second quarter of this year. More typical was Colorado Springs where rents increased from $706.51 to $717.25 during the same period. By comparison, average rents in metro Denver fell from $886.14 to $870.37 year over year.
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: http://dola.colorado.gov/cdh.