The vacancy rate in Colorado apartments was down during the third quarter of 2012, falling year over year statewide and in Colorado Springs, Metro Denver, Grand Junction, and in the Ft. Collins-Loveland area. According to a report released Thursday by the Colorado Division of Housing, the combined vacancy rate for Colorado was 4.6 percent during the third quarter. The vacancy rate during the third quarter was down from 2011’s third-quarter rate of 5.0 percent, and was the lowest vacancy rate recorded since the first quarter of 2001.
Demand for rental units continued at high levels in Colorado during the third quarter, and demand was especially strong in northern Colorado. The vacancy rate fell year over year from 2.2 percent to 2.1 percent in the Ft. Collins-Loveland area for the third quarter, although it rose from 1.8 percent to 3.1 percent in Greeley over the same period.
A vacancy rate below five percent is generally regarded by industry observers as a sign of a tight market.
The vacancy rate also fell below five percent in Grand Junction where it dropped year over year from 7.7 percent to 3.8 percent during the third quarter.
The metro Denver vacancy rate during 2012’s third quarter, released last month in a separate survey, fell year over year from 4.9 percent to 4.3 percent.
“Northern Colorado vacancies are at the low levels we saw back in the late nineties,” 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. “The strong employment in the region is helping drive that, and statewide, a lack of new construction is also an important factor.”
Rents headed up as vacancy rates declined. The statewide average rent in Colorado increased 5.1 percent from 2011’s third quarter to 2012’s third quarter, rising from $898 to $944, which is an all-time high. Across the state, the average rent increased in all metro areas except Grand Junction. The average rent in the Ft. Collins-Loveland area, for example, increased 7.3 percent, year over year, while the average rent in Pueblo grew 8.4 percent. During the same period, the average rent in Colorado Springs increased only 1.1, although it reached a new all-time high during the third quarter. The average rent fell 2.6 percent in Grand Junction, year over year.
“This is the second quarter in a row in which the average rent grew all along the Front Range, and by fairly sizable amounts in most cases,”said Ryan McMaken, an economist with the Colorado Division of Housing. “Demand is strong enough to the point that even in markets where unemployment is still above eight percent, as in Pueblo and Colorado Springs, landlords were still able raise rents.”
Average rents in all metropolitan areas measured were Colorado Springs; $787, Ft. Collins/Loveland, $1024; Grand Junction, $638; Greeley, $693; Pueblo, $587.
The metro Denver average rent, measured in a separate survey, was $986 during the third quarter.