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Apartment vacancies rise across Colorado
Colorado Springs and Sterling the only areas with falling rates
The Colorado statewide apartment vacancy rate for 2009’s third quarter increased to 7.4 percent, rising from 2008’s third quarter rate of 6.6 percent. According to a report released Thursday by the Department of Local Affairs’ Division of Housing, only Colorado Springs and Sterling, out of 22 cities and towns surveyed, reported fewer vacancies during the third quarter of this year than during the same period last year.
Among large metropolitan areas, Fort Collins and Loveland reported the lowest vacancy rates at 5.9 percent and 4.3 percent respectively. All other metro areas measured in the survey reported vacancy rates above 7 percent. Pueblo and Grand Junction reported the largest increases from the third quarter of last year to the third quarter of this year. In Pueblo, rates rose from 6.8 percent to 12 percent year over year, while they rose from 2.4 percent to 7.5 percent in Grand Junction during the same period.
Third quarter vacancies in the metro Denver area, measured in a separate survey last week, were at 7.4 percent.
“Although unemployment in Colorado fell in recent months, unemployment is still up when compared to last year,” said Gordon Von Stroh, professor of business at the University of Denver, and the report’s author. “In Grand Junction, where vacancies are up quite a bit, the unemployment rate rose from 3.7 percent to 8.2 percent over the last year.”
In general, a vacancy rate of 5 percent is considered to be the “equilibrium rate.”
Colorado Springs was the only metropolitan area where vacancies fell. Experts note this is likely due to recent troop arrivals in the region which has led to an increased demand for housing in the area.
Average rents were flat or falling in many areas of the state from the third quarter of 2008 to the same period this year. Rents fell in Colorado Springs, Greeley and the Fort Collins/Loveland area. In spite of increases in the vacancy rate, however, some areas reported rental increases. Average rents increased from $514.17 to $554.58 year over year in Pueblo, and they rose from $670.24 to $674.31 in Grand Junction during the same period.
In non-metropolitan areas of the state, average rents rose in Alamosa, Buena Vista, Durango, Ft Morgan/Brush, Glenwood Springs, Montrose, Sterling, Summit County, and “Southeastern Colorado.” Rents were flat or falling in Aspen, Cañon City, Eagle County, Gunnison, Lake County, Salida and Steamboat Springs.
“It’s difficult to raise rents in the current economic environment, and we’ve seen rents fall in several metro areas including the Denver metro area, which is certainly good news for renters” said Ryan McMaken, a spokesperson with the Division of Housing. “Many owners who are trying to cover the increasing costs of apartment ownership will continue to raise rents where they can. But this carries the risk of increasing costly turnover, so it’s a balancing act.”