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Apartment vacancies in the Denver metro area fell again in the second quarter, dropping to 6.1 percent. According to a report released Tuesday by the Apartment Association of Metro Denver and the Department of Local Affairs’ Division of Housing, apartment vacancy rates fell to the lowest rate reported for the second-quarter since 2001, falling from 2010’s first-quarter rate of 6.5 percent. The vacancy rate also fell from last year’s second-quarter rate of 9.0 percent.
In recent years, vacancy rates have tracked closely with the unemployment rate, illustrating a close connection between job growth and demand for apartments. In recent quarters, however, vacancy rates have remained low in spite of job losses and slow job creation.
“Vacancy rates continue to tighten in spite of meager job growth,” said Gordon Von Stroh, professor of business at the University of Denver, and the report’s author. “There has been little new apartment development in recent years, so the tight supply we do have will become even tighter once we start to see some large-scale job creation.”
Vacancy rates had initially increased following the rapid increase in the unemployment rate in late 2008 and early 2009, rising to 9.0 percent. But the vacancy rate quickly fell below eight percent by the end of 2009, and is now at a two-year low.
For 2010’s second quarter, the highest vacancy rates were found in Denver County where rates fell year-over-year from 9.8 percent to 7.4 percent. Rates were lowest in Douglas County where vacancies fell year-over-year from 5.8 percent to 3.9 percent. Vacancy rates fell in all metro Denver counties form the second quarter of 2009 to the same period this year.
2010’s first quarter vacancy rates by county were Adams, 5.2; Arapahoe, 6.4; Boulder/Broomfield, 4.9; Denver, 7.4; Douglas, 3.9; Jefferson, 5.4.
Rent growth was unusually strong. The metro-wide average rent increased year over year from $870.37 to $899.97 during the second quarter. For the first time in more than a year, all counties reported year-over-year increases in county-wide average rents.
“We’re starting to see signs of more significant increases in rents,” said Ryan McMaken, a spokesperson for the Division of Housing. “Rent growth, which hasn’t been adjusted for inflation in this survey, has been very moderate for several years now. But we’re likely to see more growth in the short- and medium-term as population grows and supply remains stable.”
Average rents for all counties were: Adams, $892.48; Arapahoe, $856.54; Boulder/Broomfield, $995.07; Denver, $909.46; Douglas, $1085.79; and Jefferson, $845.38.
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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