Increases in demand for rentals broadened to all metros
of Colorado
during the second quarter with vacancy rates in all metros dropping to 6 percent
or below. The lowest metro-wide vacancy rate of 3.5 percent was found in the Ft.
Collins/Loveland area and the highest was a rate of 6.0 percent in Colorado Springs. A vacancy
rate below 5 percent indicates a tight market.
The metro Denver vacancy rate during 2012’s second
quarter, released last month in a separate survey, was flat year over year at
4.8 percent.
Although employment typically is a major driver in demand
for rental housing, even areas with unemployment rates above 9 percent, such as
Grand Junction and Colorado Springs, saw vacancy rates fall during
the second quarter.
“In spite of some relatively weak job growth in some
metros, household formation continues in Colorado, and people are looking to rent apartments,” said
Ron Throupe, a professor of real estate at the University of Denver’s Burns School of Real Estate and
Construction Management, and the report’s author. “In those areas with the most
job growth, like Larimer county, the apartment market has become very tight.”
With the exception of the Ft. Collins/Loveland area, the vacancy rate also fell
in all metros from the first quarter to the second quarter of this year. Seasonal factors often push vacancies down
from the first quarter to the second quarter, however.
Vacancy rates in all metropolitan areas were: Colorado Springs, 6.0 percent; Ft. Collins/Loveland, 3.5
percent; Grand Junction, 5.5 percent; Greeley,
5.4 percent; Pueblo, 4.3 percent.
The statewide average rent in Colorado increased 7.4
percent from 2011’s second quarter to 2012’s second quarter, rising from $877 to
an all-time high of $942. Across the state growth in average rents varied
considerably, although all metros reported year-over-year increases. The average rent in the Colorado Springs area, for
example, increased 1.8 percent, year over year, while the average rent in the
Ft. Collins/Loveland area rose 12.8 percent.
The largest increase in the average rent was found in the
Pueblo area
where it rose 17.5 percent from the second quarter of 2011 to 2012’s second
quarter, following four quarters of year over year declines.
“We’re now seeing signs of the kind of general rent
growth across all metros that we haven’t seen since 2008,” said Ryan McMaken
spokesman with the Colorado Division of Housing. “Limited supply is an issue.
New units are on the way, but there’s a lag on that, and some metros aren’t
seeing much new construction at all.”
Average rents in all metropolitan areas measured were
Colorado Springs; $776, Ft. Collins/Loveland,
$996; Grand Junction, $674; Greeley, $662; Pueblo, $602.
The metro Denver average rent, measured in a separate
survey, was $952 during the second quarter.
