Getting your player ready...
The apartment vacancy rate in the Denver metro area fell to 4.8 percent in the second quarter, dropping to the lowest vacancy rate recorded since the first quarter of 2001, according to a report released Monday by the Apartment Association of Metro Denver and the Colorado Division of Housing.
The report shows apartment vacancy rates fell 21 percent year-over-year from last year’s second-quarter rate of 6.1 percent. The vacancy rate was also down from 2010’s first-quarter rate of 5.5 percent. The vacancy rate generally falls from the first to the second quarter as a result of seasonal factors.
Tight market
“A vacancy rate below 5 percent is generally regarded as a sign that the market is tight,” said Gordon Von Stroh, a professor of business at the University of Denver, and the report’s author. “The vacancy numbers haven’t been lower than this since before the dot-com bust in Colorado, and that was a period marked by a scarcity of rental housing in many areas.”
The report shows apartment vacancy rates fell 21 percent year-over-year from last year’s second-quarter rate of 6.1 percent. The vacancy rate was also down from 2010’s first-quarter rate of 5.5 percent. The vacancy rate generally falls from the first to the second quarter as a result of seasonal factors.
As vacancy rates moved down, the area’s median rent increased. During the second quarter of 2011, the median rent in metro Denver rose to $863.37, increasing 2.5 percent from 2010’s second-quarter median rent of $842.70. In county-level market areas, the median rent rose in Adams, Arapahoe and Jefferson counties, but fell slightly in Denver County, Douglas County and the Boulder/Broomfield area. The region with the largest year-over-year increase in median rent was Arapahoe County with an increase of 4 percent from $806.11 to $838.79. The largest decline was found in Denver County where the median rent fell 1.6 percent from $814.14 during 2010’s second quarter to $800.94 during this year’s first quarter.
Rents lag inflation
“On average, rents were very flat in many areas between 2002 and 2010, but we’ve begun to see some sustained growth in recent quarters.” said Ryan McMaken, a spokesman for the Division of Housing. “However, in the year-over-year comparison for the second quarter, rents haven’t really kept up with inflation. The CPI is up about 3 percent over the past year, but the metro Denver median rent increased 2.5 percent. More desirable properties are certainly able to push rents significantly, but in general, it looks like many owners have not been able to push rents as much as they may have liked.”
Although market rents increased in many areas over the past year, rental losses due to concessions, discounts and delinquencies rose slightly. Rental losses rose to 11.4 percent during the second quarter of 2011, rising from 2010’s second-quarter rate of 9.6 percent.
Contact John Rebchook at JRCHOOK@gmail.com
