The statewide apartment-vacancy rate plunged to a seven-year low of 5.7 percent during the third quarter.
That’s down from 7.2 percent during the third quarter last year, according to a report released today by the Colorado Division of Housing.
“We’ve continued to have good statewide absorption,” said Terrance Hunt, principal of Apartment Realty Advisors.
Much of it is fueled by echo boomers who are graduating from high school and college and entering the rental market, Hunt said.
Despite the low vacancy rate, developers are not building more units. With construction costs up as much as 60 percent, average rents aren’t rising enough to support building new units.
“We need to see the rent grow by 30 percent before we will see development and get some relief,” Hunt said.
The average rent during the third quarter dropped to $821, compared with $825 during the third quarter last year.
Resort towns are particularly hard hit, with all areas west of the Front Range reporting vacancy rates below 5 percent.
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
