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The full report is available from the Apartment Association of Metro Denver.
Following an unexpected drop in the third quarter, metro Denver apartment vacancy rates rose during 2009’s fourth quarter to 7.7 percent. According to a report released Wednesday by the Apartment Association of Metro Denver and the Department of Local Affairs’ Division of Housing, vacancy rates rose from the third quarter’s rate of 7.4 percent. When compared to the fourth quarter of 2008, vacancy rates fell from 7.9 percent to 7.7 percent.
“In general, we expect to see vacancy rates rise from the third quarter to the fourth due to seasonal factors, said Gordon Von Stroh, professor of business at The University of Denver and the report’s author. “But at 7.7 percent, we still see softness in the market.”
The highest vacancy rates were found in Denver County where rates rose year-over-year to 8.8 percent, and were lowest in Douglas County where vacancies fell year-over-year to 5.5 percent. During the same period, vacancy rates rose in Denver and Arapahoe Counties, and fell in Adams County, Douglas County, and in the Boulder/Broomfield area. Jefferson County reported no change.
2009’s fourth quarter vacancy rates by county were Adams, 6.3; Arapahoe, 8.6; Boulder/Broomfield, 5.8; Denver, 8.8; Douglas, 5.5; Jefferson, 7.3.
In general, a vacancy rate of 5 percent is considered the “equilibrium” rate. Rates below 5 percent indicate tight markets.
The overall average rent in the metro Denver area fell to $875.39. Rents fell from the third quarter average rent of $880.99 and also fell year-over-year from 2008’s fourth quarter rate of $888.81.
Observers noted that the job market is impacting vacancies and rents.
“In December, unemployment in the Denver area rose for the first time since August,” and personal income growth has been less than 1 percent, said Pat Coyle, Director of the Division of Housing. “This means that many renters will be doubling up and looking for ways to cut costs.”
When compared to the fourth quarter of 2008, Only Douglas County and Jefferson County reported increases in overall average rents. Adams, Arapahoe, Boulder/Broomfield, and Denver counties all reported decreases in overall average rents.
“The data is showing that young people and recent college grads are living at home in greater numbers right now,” said Lauren Brockman of Orion Real Estate Services. “Without more job growth and income growth, it’s going to be difficult to increase rents and keep units full.”
The highest average rent was reported in Douglas County at $1027.15, and the lowest was reported in Arapahoe County at $847.95. Average rents for all counties were: Adams, $809.39; Arapahoe, $847.95; Boulder/Broomfield, $943.23; Denver, $902.66; Douglas, $1027.15; and Jefferson, $848.75.
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/
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