Thursday, May 27, 2010

Single-family rental vacancies hit two-year low, rents rise

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Single-family rental vacancies hit two-year low, rents rise

Vacancies in for-rent condos, single-family homes, and other small properties across metro Denver fell to a two-year low of 3.1 percent during 2010’s first quarter. The vacancy rate was 3.6 percent during the first quarter of 2009. The last time the metro-wide vacancy rate fell below 3.1 percent was during 2008’s first quarter, when vacancies dropped to 2.7 percent.

According to a report released Thursday by the Colorado Department of Local Affairs’ Division of Housing, the number of days on the market for single-family rentals and similar properties fell from 53 days during the first quarter of 2009 to 45 days during the first quarter of 2010. Properties were also on the market for fewer days during the first quarter of this year as compared to the fourth quarter of last year when properties were on the market for almost 54 days.

“Living in a single-family home continues to be popular, but purchasing one isn’t an option for as many households in the current climate,” said Gordon Von Stroh, professor of business at the University of Denver, and the report’s author. “So, more people are looking to rent, and that has brought down the vacancy rates quite a bit from their peaks above 9 percent that we saw back in 2005.”

The metro-wide fall in vacancies in single-family rentals and similar properties was led by falling vacancies in Adams County and Douglas County where, year over year, vacancy rates fell by more than once percentage point to 3.7 percent and 0.9 percent, respectively. Vacancy rates also fell in Arapahoe and Denver Counties. Jefferson County and Boulder/Broomfield area reported slight increases.

Vacancy rates for all counties surveyed were: Adams, 3.7 percent; Arapahoe, 2.6 percent; Boulder/Broomfield, 2.3 percent; Denver, 3.0 percent; Douglas, 0.9 percent; and Jefferson, 3.9 percent.

Average rents climbed as vacancies tightened.

The average rent for single-family and similar properties rose to $1035.56 during 2010’s first quarter, rising from 2009’s first quarter rate of $1004.44. 2009’s first-quarter average rent is the highest average rent yet recorded for the first quarter.

“The fact that average rents continue to rise shows that renter demand for these properties remains relatively high in spite of a soft job market,” said Ryan McMaken, a spokesperson for the Colorado Division of housing. “Owners can apparently manage to raise rents a little, but uncertainty about wages and job security for renters will put some downward pressure on rents also.”

Average rents for all counties were: Adams, $1099.39; Arapahoe, $1032.89; Boulder/Broomfield, $1684.57; Denver, $984.52; Douglas, $1367.76; and Jefferson, $969.50.

The Colorado Statewide Vacancy and Rent Study is released each quarter by the Colorado Division of Housing. The Report is available online at the Division of Housing web site: http://dola.colorado.gov/cdh. 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.