Wednesday, November 27, 2013

Apartment vacancies in Greeley hit 18 year low as market tightens across Front Range

Apartment vacancy rates across Colorado’s Front Range remained low during the third quarter, with northern Colorado’s markets reporting occupancy rates of more than 97 percent in most submarkets, and Greeley hitting near an all-time low in vacancy.

According to a report released Wednesday by the Colorado Division of Housing, the vacancy rate was 2.8 percent in the Fort Collins-Loveland area and only 1.3 percent in Greeley, which was the lowest vacancy rate reported in Greeley since 1995.

The vacancy rate fell, year over year, in Colorado Springs and in Pueblo, signaling growing demand for apartments in all Colorado metros except Grand Junction.

“The Fort Collins market has been tight for several years at this point, and continues to be so, but in just 18 months, Greeley has gone from being a market with only moderate demand to a very tight one,” said Ryan McMaken, an economist with the Colorado Division of Housing. “As usual, employment is a major driver in all metros, as is the fact that new multifamily construction has only recently begun to pick up in Greeley.”

In Colorado Springs, the vacancy rate fell to 5.4 percent from last year’s third-quarter rate of 6.1 percent, and in Pueblo, the rate fell to 9.3 percent during the third quarter from 15.8 percent a year earlier. Grand Junction’s vacancy rate remained relatively high at 7.8 percent reflecting a shrinking labor force and flat employment totals over the past year in that metro area.

The metro Denver vacancy rate, measured in a separate survey, was 4.4 percent, up from 4.3 percent during the third quarter of 2012.

The average rent increased, year over year, in all metros except Grand Junction from the third quarter of 2012 to the third quarter of 2013. The largest increase was found in Colorado Springs where the average rent rose 5.4 percent, year over year, with Greeley’s average rent increasing 5.1 percent over the same period.

“Although vacancies are quite low there, we did see rent growth flatten out in the Fort Collins-Loveland area,” McMaken said. “That’s one of the few metros where we’ve seen a significant amount of new construction in recent years, so new supply is helping a little to moderate rents.”

Average rents in all metropolitan areas measured for the first quarter of 2013 were Colorado Springs; $830, Ft. Collins/Loveland, $1043; Grand Junction, $577; Greeley, $728; Pueblo, $597. The average rent in metro Denver, measured last month in a separate survey, was $1,048.