Wednesday, February 22, 2012

Colorado apartment vacancy rate falls to 5.6 percent, rents rise

The vacancy rate in Colorado apartments was down during the fourth quarter of 2011, falling in five of the six metro areas measured from the fourth quarter of 2010 to the fourth quarter of 2011. According to a report released Wednesday by the Colorado Division of Housing, the combined vacancy rate for apartments in six metro areas across Colorado during 2011’s the fourth quarter was 5.0 percent. The rate was down from 2010’s fourth quarter rate of 5.6 percent. The combined vacancy rate fell to the lowest fourth-quarter vacancy rate recorded since the survey began measuring the fourth quarter during 2007.

Among the state’s metro areas, only Greeley reported year-over-year increases. In Greeley, the vacancy rate rose from 5.1 percent during the fourth quarter of 2010 to 6.4 percent during the fourth quarter of 2011. The vacancy rate declined in all other areas. The largest drop was found in Pueblo where the vacancy rate fell from 10.2 percent during the fourth quarter of 2010 to 7.3 percent during the same period of 2011.

The metro Denver vacancy rate during 2011’s fourth quarter, released last month in a separate survey, fell year over year from 5.5 percent to 5.4 percent.

“We’ve seen year-over-year drops in vacancies in all metros except Greeley for at least the past four quarters,” 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. “Markets have begun to respond with new construction, but little of that has come online so far.”

Vacancy rates in all metropolitan areas were: Colorado Springs, 6.7 percent; Ft. Collins/Loveland, 3.4 percent; Grand Junction, 7.0 percent; Greeley, 6.4 percent; Pueblo, 7.3 percent.

Average rents across the state have increased as vacancies have fallen.

The statewide average rent in Colorado increased 3.2 percent from 2010’s fourth quarter to 2011’s fourth quarter, rising from $871 to $900. Across metro areas in the state, however, growth in average rents varied considerably. The average rent in the Greeley area, for example, increased 7.0 percent, year over year, while the average rent in Pueblo fell 3.2 percent. During the same period, the average rent in Colorado Springs increased 5.0 percent while the average rent in Grand Junction rose 3.8 percent.

The largest increase in the average rent was found in the Fort Collins/Loveland area where it rose 9.1 percent from the fourth quarter of 2010 to 2011’s fourth quarter.

“The overall trend in rents continues upward and rent increases in Fort Collins, Greeley and Colorado Springs were quite substantial during the fourth quarter,” said Ryan McMaken, a spokesman with the Colorado Division of Housing. “This is likely to continue in the near term as more households look to rental housing and as in-migration from other states remains strong.”

Average rents in all metropolitan areas measured were Colorado Springs; $775, Ft. Collins/Loveland, $973; Grand Junction, $640; Greeley, $677; Pueblo, $535.

The metro Denver average rent, measured in a separate survey, was $932 during the fourth quarter.