Vacancy rates varied considerably in different metros of the state, however, with northern Colorado and metro Denver showing historically-low vacancy rates, while vacancy rates increased in southern Colorado and Western Colorado.
The vacancy rate in the Fort Collins-Loveland area declined again to 2.4 percent during 2012’s fourth quarter, falling from 2011’s fourth-quarter rate of 3.4 percent. In Greeley over the same period, the vacancy rate dropped from 6.4 percent to 3.2 percent. The metro Denver vacancy rate, measured last month in a separate survey, fell year over year from 5.4 percent to 4.9 percent.
A different trend appeared in southern and western Colorado where vacancy rates increased. In Colorado Springs, the vacancy rate increased to 7.1 percent during 2012’s fourth quarter, rising from 2011’s fourth quarter rate of 6.7 percent. Over the same period, the vacancy rate in Pueblo increased from 7.3 percent to 10.7 percent, and in Grand Junction from 7.0 percent to 9.7 percent.
“Differences in the employment situation in different metros help explain these very different trends across the state,” said Ryan McMaken, an economist with the Colorado Division of Housing. “Those places with declining unemployment are seeing fewer vacancies. Interestingly, however, rents continued to rise across the board as owners tried to cover increases in their operating costs.”
The average rent increased in all metros from the fourth quarter of 2011 to the fourth quarter of 2012, and the statewide composite average rent increased 4.7 percent from $900 during 2011’s fourth quarter to $943 during the fourth quarter of 2012. The largest increase was found in Pueblo where the average rent surged 14.2 percent. This is the second time over the past year that rents have surged in Pueblo, although the average rent in Pueblo, at $612, remains the lowest of any metro in the state. Increases in the average rent in all other metros were much smaller with the average rent increasing 2.9 percent in Grand Junction year over year, while the average rent grew 1.8 percent in Colorado Springs during the same period.
Growth in the average rent was more solid in the Fort Collins-Loveland area where the average rent grew 3.5 percent year over year, and it grew 4.9 percent in metro Denver during the same period. The metro with the highest average rent was the Fort Collins-Loveland area where the average rent was $1,008 during the fourth quarter of 2012.
Average rents in all metropolitan areas measured for the fourth quarter of 2012 were Colorado Springs, $790; Ft. Collins/Loveland, $1008; Grand Junction, $659; Greeley, $692; Pueblo, $612. The average rent in metro Denver, measured last month in a separate survey, was $978.
A vacancy rate of 5 percent or below suggests a tight market. The statewide composite vacancy rate and average rent includes metro Denver.