Last week, the 3rd Q vacancy and rent survey for Metro Denver was made available. Due to our only partial ownership of the data, the new data will be made available in about 60 days. 2nd Q and historical data is available now. Until then, it can be purchased through the Apartment Association of Metro Denver. The release is below.
Metro Denver apartment vacancies fall
Falling for the first time in 21 months, apartment vacancy rates fell in the Denver Metro to 7.4 percent during the third quarter of 2009. According to a report released Thursday by the Apartment Association of Metro Denver and the Department of Local Affairs - Division of Housing, vacancy rates hit 9 percent during the second quarter of this year after six quarters of rising vacancies.
Falling over one-and-a-half percent during the third quarter, vacancy rates are now at the lowest rate since the third quarter of last year. Nevertheless, year-over-year comparisons show increases. The vacancy rate during the third quarter of last year was almost a point lower at 6.5 percent.
The recent declines in the unemployment rate may be having an effect on vacancies in the region.
“We know that vacancy rates tend to be sensitive to unemployment rates in Colorado,” said Gordon Von Stroh, professor of business at the University of Denver. “Unemployment peaked at 7.8 percent at the end of the second quarter, and slowly fell to 6.7 percent over the third quarter. The vacancy rate reflects this trend.”
Observers also noted that continued population increases have also buoyed the demand for housing.
“There’s still demand for rental housing because the population continues to grow in Colorado,” said Ryan McMaken, a spokesperson with the Division of Housing. “Over 30,000 new households were formed in Colorado during 2008, and even when job growth is not robust, new households translates into a demand for housing.”
Arapahoe County and Denver County tied for the highest county-wide vacancy rates at 8.5 percent, and Douglas County reported the lowest rate at 4.3 percent. From the third quarter of last year, to the third quarter of this year, vacancies increased in Arapahoe County, Denver County, and the Boulder/Broomfield area. During the same period, vacancies fell in Adams, Douglas, and Jefferson Counties. Vacancy rates for all counties surveyed were: Adams, 6.7 percent; Arapahoe, 8.5 percent; Boulder/Broomfield, 5.5 percent; Denver, 8.5 percent; Douglas, 4.3 percent; and Jefferson, 6.3 percent.
In general, a vacancy rate of 5 percent is considered the “equilibrium” rate. Rates below 5 percent indicate tight markets.
During the second quarter of 2009, average rents fell to $880.99 when compared to $892.22 from the third quarter of last year. The average rent during the second quarter of this year was $870.37.
In spite of falling vacancy rates, rent growth was limited. When compared to the third quarter of 2008, Only Arapahoe County and Douglas County reported increases in overall average rents. Adams, Boulder/Broomfield, Denver, and Jefferson counties all reported decreases in overall average rents.
The highest average rent was reported in Douglas County at $1058.13, and the lowest was reported in Jefferson County at $818.18. Average rents for all counties were: Adams, $848.22; Arapahoe, $862.16; Boulder/Broomfield, $951.11; Denver, $888.07; Douglas, $1058.13; and Jefferson, $818018.
The Vacancy and Rent Surveys are a service provided by the Apartment Association of Metro Denver and the Colorado Department of Local Affairs’ 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 full Report is available through the Apartment Association of Metro Denver at www.aamdhq.org; and limited information is available online at the Division of Housing web site: http://dola.colorado.gov/cdh/