May 10, 2012
Driven by hot apartment-rental markets in Fort Collins and Denver, the overall vacancy rate for the state dropped to 5.2 percent in the first quarter, according to a state Division of Housing report released late Wednesday.
That’s the lowest first-quarter vacancy rate since 2001.
The rate also dropped from the fourth quarter’s 5.6 percent, and from 5.5 percent in Q1 2011.
“Just as we expected, the areas with the hottest job markets have the highest demand for apartments right now,” said Ryan McMaken, Colorado Division of Housing spokesman.
Vacancy rates dropped in the metro Denver, Pueblo and Fort Collins markets. Those areas showing a year-over-year increase included Colorado Springs, Grand Junction and Greeley, according to the report.
“That 3 percent vacancy rate in Fort Collins is the lowest we’ve seen,” McMaken said. “We rarely see numbers below 3 percent.”
Likewise, the average statewide rent rose 4.6 percent from Q1 2011 to $914. The Fort-Collins/Loveland market showed the biggest average rent hike, 11 percent year over year.
“It’s really a hot employment market now,” said Carrie Gillis, board member of the Northern Colorado Rental Housing Association.
Gillis said the association is tracking some 2,200 units that either are being developed or in final planning states.
“What’s nice from a provider of multifamily housing standpoint is the rents are starting to creep up to a place where it’s economically feasible to be in this business,” Gillis said. “It’s nice to be able to have the rent support the upgrades and amenities renters want.”
Report author Ron Throupe, professor of real estate at the University of Denver’s Burns School of Real Estate and Construction Management, said he expects the major markets, like Denver’s, to continue improving.
“Those areas picked up speed again in the first quarter in pricing and vacancy reduction, though there are patchy results from other areas in the state,” Throupe said.
Here are the vacancy rates and average rents from the areas studied for the report:
• Metro Denver: 4.9 percent, $952.
• Colorado Springs: 6.4 percent, $754.
• Fort Collins/Loveland: 3 percent, $1,001.
• Grand Junction: 10.4 percent, $625.
• Greeley: 5.8 percent, $688.
• Pueblo: 5.9 percent, $570.