Friday, June 11, 2010

Vacancies in Colorado fall as rents rise

The average rent in Colorado, unadjusted for inflation, has increased seven percent since 2005. Among metropolitan areas, the average rent has increased the most in Grand Junction where average rent has increased 35 percent. The average rent increased 5.2 percent, which was the smallest increase among metropolitan areas. In all metropolitan areas except Grand Junction, the average rent has increased between 5.2 percent and 14.1 percent since 2005.

Average rents across the state have slowly grown in recent quarters as vacancy rates have been surprisingly small given lack of job growth and an unemployment rate above 8 percent. Historically, demand for rental housing has increased most with gains in job creation.

Since the second quarter of 2009, vacancy rates have fallen across Colorado in spite of weak and negative job growth. Only Grand Junction and Pueblo reported increases in vacancies during this period. The tightening availability of rental housing has been driven by lack of new construction in rental housing in recent years coupled with increased population growth in spite of weak job growth. The Colorado economy, which compares favorably to the economies of most other regions of the United States, has led to more residents either choosing to stay in Colorado, or has led to job seekers relocating to Colorado in search of jobs in what is a relatively superior market for job seekers.

During the first quarter of this year, the Colorado statewide apartment vacancy rate decreased to 6.6 percent, falling from 2009’s first quarter rate of 8.5 percent. The statewide decline in vacancies was driven by declines in vacancies in Grand Junction, metro Denver, Colorado Springs and along the eastern plains. Fort Collins and Pueblo were the only metropolitan areas reporting higher vacancies, year-over-year.

Numerous mountain areas also reported vacancy rate increases from the first quarter of last year to the same period this year, including Aspen, Durango, Eagle County, Glenwood Springs, Steamboat Springs and Summit County.

Vacancy rates in all metropolitan areas were Colorado Springs, 6.9 percent; Denver metro, 6.5 percent; Ft. Collins/Loveland, 4.9 percent; Grand Junction, 11.6 percent; Greeley, 6.9 percent; Pueblo, 12.6 percent.

The first quarter’s statewide average rent fell from $844 during 2009’s first quarter to $840 during the first quarter of this year. Among metropolitan areas, average rents fell year-over-year in Fort Collins, Grand Junction and the metro Denver area, but were up in Colorado Springs, Greeley and Pueblo. Average rents rose year-over-year in several mountain areas including Aspen, Alamosa, Buena Vista, Eagle County, Glenwood Springs and Summit County.

The average rent in Fort Collins fell from $854 during the first quarter of last year to $837 during the first quarter of this year. In Grand Junction, where vacancies hit 13.3 percent during 2009’s fourth quarter, first quarter average rents fell from $680 to $663, year-over-year.

Average rents in all metropolitan areas measured were Colorado Springs, $709.99; Denver metro, $877.16; Ft. Collins/Loveland, $837.99; Grand Junction, $663.47; Greeley, $660.86; Pueblo, $547.03.

Table: Rates of increase in
average rent (1stQ 2005-1stQ 2010)

Colorado Statewide 7.006369
Denver Metro 5.282113
Colo Springs 5.505952
Fort Collins/Loveland 13.26116
Grand Junction 35.03055
Greeley 8.01964
Pueblo 14.19624