Thursday, May 10, 2012

Colorado apartment vacancy rate falls again to 5.2 percent, owners push rents

The vacancy rate in Colorado apartments was down during the first quarter of 2012, falling year over year in Pueblo, Metro Denver and in Ft. Collins, but rising in Colorado Springs, Grand Junction and Greeley. According to a report released Thursday by the Colorado Division of Housing, the combined vacancy rate for apartments in 22 cities and towns across Colorado was 5.2 percent during the first quarter.  The rate was down from 2011’s first quarter rate of 5.5 percent. The combined vacancy rate fell to the lowest first-quarter vacancy rate recorded since 2001, and the third quarter of 2011 remains the only quarter since 2001 to post a statewide vacancy rate below 5.2 percent.

Increases in demand for rentals were uneven across the state, however, with year-over-year increases in vacancies being reported in Colorado Springs, Grand Junction and Greeley. The rising vacancies likely reflected muted job growth in those markets in March with unemployment rates above 9 percent in all three areas.

The vacancy rate in the Ft. Collins-Loveland area, on the other hand, fell to 3.0 percent, year over year, as employment remained strong in the Ft. Collins-Loveland area, dropping to 6.7 percent in March 2012.  

The metro Denver vacancy rate during 2011’s first quarter, released last month in a separate survey, fell year over year from 5.5 percent to 4.9 percent.

“The statewide decline in vacancies is being driven by high demand for rental housing in the metro Denver area and in the Ft. Collins-Loveland area,” 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. “Not surprisingly, we also see some of the most solid rent growth in those same areas.”  

Vacancy rates in all metropolitan areas were: Colorado Springs, 6.4 percent; Ft. Collins-Loveland, 3.0 percent; Grand Junction, 10.4 percent; Greeley, 5.8 percent; Pueblo, 5.9 percent.

The statewide average rent in Colorado increased 4.6 percent from 2011’s first quarter to 2012’s first quarter, rising from $873 to $914. Across the state, however, growth in average rents varied considerably. The average rent in the Greeley area, for example, increased 4.3 percent, year over year, while the average rent in Pueblo was flat at -0.01 percent. During the same period, the average rent in Colorado Springs increased 2.4 percent, and it fell 4.8 percent in Grand Junction, year over year.  

The largest increase in the average rent was found in the Fort Collins-Loveland area where it rose 11.1 percent from the first quarter of 2011 to 2012’s first quarter.

“The trend in rents in clearly toward growth and we’re seeing rent growth even in areas with rising vacancy rates right now,” said Ryan McMaken spokesman with the Colorado Division of Housing. “This suggests that owners are optimistic about future demand even in areas where declines in the vacancy rates have stalled during the past quarter.”

Average rents in all metropolitan areas measured were Colorado Springs; $754, Ft. Collins-Loveland, $1001; Grand Junction, $625; Greeley, $688; Pueblo, $570. 

The metro Denver average rent, measured in a separate survey, was $952 during the first quarter.