Metro Denver apartment vacancy rate falls to ten-year low
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The apartment vacancy rate in the Denver metro area fell to 5.5 percent in the fourth quarter, dropping to the lowest fourth-quarter vacancy rate recorded since the year 2000. According to a report released Tuesday by the Apartment Association of Metro Denver and the Colorado Division of Housing, apartment vacancy rates fell 28 percent year-over-year from last year’s fourth-quarter rate of 7.7 percent. The vacancy rate rose slightly from 2010’s third-quarter rate of 5.3 percent, although the vacancy rate generally rises from the third quarter the fourth quarter as a result of seasonal factors.
As vacancy rates moved down, the area’s median rent increased. 2010’s fourth-quarter median rent rose to $846.36 from 2009’s fourth-quarter median rent of $811.32. In individual market areas, the median rent rose year-over-year in all County-level regions covered by the survey. The region with the largest year-over-year increase in the median rent was Adams County with an increase of 8.3 percent from $791.26 to $857.16. The smallest year-over-year increase was found in Douglas County where the median rent rose 3.2 percent from $1011.78 during 2009’s fourth quarter to $1043.79 during 2010's fourth quarter.
“From 2001 to 2010, the median rent increased only 7.5 percent and wasn’t keeping up with inflation in the metro area, so rents were effectively going down” said Gordon Von Stroh, professor of Business at the University of Denver, and the report’s author. “As vacancy tightens we’ve started to see a few more increases in rents, however, and multifamily owners will undoubtedly now need to push rents in hopes of making up for those years of falling rents.”
Although market rents increased during 2010, rental losses due to concessions, discounts and delinquencies rose as well. Rental losses rose to 9.8 percent during the fourth quarter of 2010, rising from 8.7 percent during the fourth quarter of 2009.
2010’s first quarter vacancy rates by county were Adams, 5.7 percent; Arapahoe, 6.6 percent; Boulder/Broomfield, 3.6 percent; Denver, 5.2 percent; Douglas, 5.2 percent; Jefferson, 4.5 percent.
Median rents for all counties were: Adams, $857.15; Arapahoe, $829.84; Boulder/Broomfield, $957.92; Denver, $806.79; Douglas, $1043.79; and Jefferson, $823.47.
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/