Tuesday, February 22, 2011

Single-family rental vacancies at all-time low of 2 percent

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Vacancies in for-rent condos, single-family homes, and other small properties across metro Denver fell 63 percent from the fourth quarter of 2009 to a new low of 2.0 percent during 2010’s fourth quarter. According to a report released Wednesday by the Colorado Division of Housing, the vacancy rate was 5.5 percent during the fourth quarter of 2009, and was 2.9 percent during the third quarter of 2010. The fourth quarter’s vacancy rate is the lowest metro-wide rate reported since the report was started in 2004.

The average number of days on the market for single-family rentals and similar properties fell from 53.9 days during the fourth quarter of 2009 to 38.2 days during the fourth quarter of 2010. The number of days on the market also fell from 2010’s third-quarter average of 36.0 days.

At the county level, the lowest vacancy rates were found in Douglas County and in the Boulder/Broomfield area. The vacancy rate was 0.9 percent in Douglas County, and there were no vacancies among the units surveyed in Boulder County.

The highest county-wide vacancy rate, found in Adams County, was 3.6 percent.

Vacancy rates for all counties surveyed were: Adams, 3.6 percent; Arapahoe, 1.3 percent; Boulder/Broomfield, 0.0 percent; Denver, 3.0 percent; Douglas, 0.9 percent; and Jefferson, 1.3 percent.

“Vacancies are certainly low and properties are renting up quickly,” said Susan Melton, owner of Assured Management in Lakewood. “In the past, the speed at which these homes rent up would tell us that the rent’s too low, but it turns out that it’s been difficult to push rents right now.”

Median rents were largely flat across the metro area in spite of declining vacancies.

The median rent for single-family and similar properties rose year-over-year to $975.00 during 2010’s fourth quarter, rising 1.0 percent from 2009’s fourth-quarter rate of $965.00. The fourth quarter’s median rent was down 2.0 percent from 2010’s third-quarter median rent of $995.00. Median rents are not adjusted for inflation.

“Part of the reason that it’s been hard to push rents is because new inventory continues to come into the market constantly,” Melton said. “We continue to see plenty of situations in which a homeowner has to move away, but decides that now is not a good time to sell. So, that property ends up being rented out and the inventory goes up, giving renters the opportunity to bargain hunt.”

Median rents for all counties were: Adams, $1135.00; Arapahoe, $920.00; Boulder/Broomfield, $1307.50; Denver, $900.00; Douglas, $1350.00; and Jefferson, $895.00.