The apartment-vacancy rate for metropolitan Denver dropped to its lowest level in nearly seven years, according to data released Thursday by the Apartment Association of Metro Denver.
During the third quarter, the vacancy rate dropped to 5.3 percent, the lowest it has been since the first quarter of 2001, when it hit 4.5 percent.
For the third quarter last year, the apartment-vacancy rate in metro Denver was 6.7 percent. It was 7.7 percent during the same quarter of 2005.
All six metro-area counties surveyed showed a decrease in their vacancy rates.
“It’s what we would expect,” said Steve Rahe, first vice president of brokerage firm CB Richard Ellis Inc. “Leasing activity has been strong based on new job creation. The numbers are representative of a growing economy.”
Metro Denver added 1,300 jobs from July to August, according to a recent report by the Metro Denver Economic Development Corp. Despite slower job growth throughout the summer, metro-area employment through the first eight months of 2007 was up 1.8 percent over the same period last year.
“Even with high foreclosures, the economic growth is fairly steady in Colorado, and the unemployment rate is still relatively low,” said Kathi Williams, director of the state’s Division of Housing. “We haven’t had a lot of new construction in multifamily units. It’s helped stabilize the market.”
About 586 new apartments were added to the inventory during the third quarter.
The high foreclosure rate doesn’t appear to be a factor in the declining vacancy rate, primarily because owners who lose their homes to foreclosure tend to move into single-family rental homes. The survey includes only multifamily apartment buildings.
“Bankers are more inclined now to keep people in their properties than they were before,” Williams said. “Folks who are being foreclosed on, if they’ve been in a single-family home, they tend to gravitate toward that single-family home-rental market rather than the apartment market. But some have dug a hole so deep, we’re having an issue with homelessness. We’re seeing a little bit of a rise in bankruptcy.”
The average rental rate decreased to $858 per month for the third quarter, down from $865 for the same period last year.
“The average rent went down because some of the higher-end product owners lowered prices,” said Gordon Von Stroh, professor of management at the University of Denver, who compiled the report.
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
