Apartment Vacancies Up in Colorado

DENVER, CO - The statewide apartment vacancy rate rose to 6.6 percent during the third quarter, according to statistics released Thursday. That is up from 5.7 percent during the same time a year ago, according to a survey by the Colorado Department of Local Affairs' Division of Housing. Vacancies increased despite the continuing high level of foreclosures, partly because younger people are either living with their parents a little longer or are choosing to find roommates, said Ryan McMaken, community relations coordinator for the division. The rise in vacancies wasn't consistent across the state.

The northern Colorado apartment market tightened during the third quarter. Fort Collins' vacancy rate dropped to 4.1 percent, down from 5 percent during the third quarter last year. Greeley's vacancy fell from 8.1 percent to 5.5 percent. "There's been a lot of growth along the I-25 and (Colorado) 34 corridor. Health care is fairly strong. A lot of people are choosing to live in Fort Collins," said Terrence Hunt, a broker with Apartment Realty Advisors.

The highest vacancy rate was in Colorado Springs, where the number rose to 9.2 percent, compared with 8.6 percent in the third quarter last year, largely because of a fluctuation in the military population, said Gordon Von Stroh, professor of management at the University of Denver Daniels College of Business.

Vacancies in Pueblo increased from 5.2 percent to 6.8 percent from the previous year. In metro Denver, the rate increased from 5.3 percent to 6.5 percent. In western Colorado and the central mountains, where vacancy rates have been low, most areas reported stable rates, with few areas reporting rates above 4 percent.

McMaken said he expects the recent surge in layoffs in the state to have a two-pronged effect on the apartment market. In some cases, they will lead to foreclosures because people with no income or greatly diminished income will not be able to continue making fixed mortgage payments, he said.

"This will help the multifamily market since some, but certainly not all, of those who go into foreclosure will move into apartments," he said. "On the other hand, multifamily will also feel the same effects with unemployment as with a slowing economy in general. People will double up, stay with their parents or find more inexpensive apartments."