The apartment market statewide remained stable during the first quarter, with some pockets faring better than others.
The statewide vacancy rate dipped to 7.5 percent, compared with 7.7 percent a year ago and down from 10.4 percent in the first quarter of 2005, according to a survey released Thursday by the Colorado Division of Housing.
But in agricultural Fort Morgan, the vacancy rate during the first quarter shot up to 9.6 percent, compared with 3.5 percent a year ago.
“A lot of it has to do with the instability of agriculture and undocumented workers,” said Kathi Williams, director of the Division of Housing.
Cargill Inc., for example, laid off a number of undocumented workers at its plant between Brush and Fort Morgan, Williams said. To replace them, Cargill hired Somali refugees who had been living in Minnesota.
The Muslim refugees are cramming into apartments as they determine whether they can live with the cultural differences before committing to long-term leases, Williams said.
Vacancy rates are among the lowest in communities such as Montrose, Durango, Buena Vista and Grand Junction, where many retirees are moving. Durango has a 4.3 percent vacancy rate, and Grand Junction has a 1.5 percent vacancy rate.
“Grand Junction for years has been an attractive retirement area,” said Gordon Von Stroh, professor of management at the University of Denver Daniels College of Business. “With the oil and gas boom, that has further exacerbated the demand.”
Although vacancies have dropped in most areas, there have been few big increases in average rents. Median rents in the Fort Collins-Loveland area increased from $693 to $744 over the past year, but Greeley rents decreased from $609 to $598.
“Employment levels can’t support new construction with a lot of amenities,” Von Stroh said. “In smaller towns, apartment owners know who lives there pretty well. They have a hard time raising the rents.”
Staff writer Margaret Jackson can be reached at 303-954-1473 or mjackson@denverpost.com.
