DENVER, CO - Apartment rents and vacancies increased in Colorado during the fourth quarter of 2008, according to a Colorado Division of Housing report released Thursday. The state's average apartment vacancy rate rose to 8 percent at the end of last year, from 6.6 percent during 2007's final quarter, largely because of the economic downturn and soft housing market. Last year's third-quarter vacancy rate also was 6.6 percent.
Greeley, Grand Junction, Loveland and metro Denver reported the biggest increases in apartment vacancies for the period. Denver-area data was released in a separate housing division report issued in January. "Looking at the nation as a whole, Colorado certainly is one of the stronger multifamily markets, but we're not immune from the national economy," Kathi Williams, the housing division's director, said in a statement.
The study surveyed apartment — also called multifamily — properties of four units and larger.
Despite higher apartment vacancies, average monthly rents in the state increased in the fourth quarter of 2008 mostly because of new apartment construction. Rents decreased from the prior-year period in only two markets — Loveland ($862.32 to $850.92) and Greeley ($631.19 to $628.77).
The survey doesn't include an overall statewide average rent, just averages by market.
Grand Junction and Pueblo saw the biggest rent increases of roughly 10 percent year over year. Average rent in Grand Junction rose to $666.22 from $603.22, and Pueblo rents went up to $518.26 from $470.65.
"In most places where you see significant rental increases, with the exception of Grand Junction, you'll find that the average is being driven up by recent new construction," Gordon Von Stroh, University of Denver business professor and the housing division report's author, said in a statement.
"New units command higher rents, and it is not necessarily the case that there is much rent growth in older units," Von Stroh said.
Other points of the report include:
• Only two markets saw apartment vacancies drop in 4Q 2008 from the previous-year period — Colorado Springs (10.8 percent to 10.4 percent) and Fort Collins (4.4 percent to 4.2 percent).
• Vacancies increased in the following markets — Metro Denver (6.1 percent to 7.9 percent), Greeley (7.2 percent to 8.1 percent), Loveland (5.6 percent to 6.1 percent).
• 4Q apartment rents per square foot ranged from a low of 76 cents in Pueblo to a high of 99 cents in the Fort Collins/Loveland area.
• Rents were highest in apartment properties of 100 units and more.
Co-sponsors of the housing division's 4Q apartment report include Apartment Realty Advisors of Denver and apartment market research provider Pierce-Eislen Inc. of Scottsdale, Ariz.
Source: Denver Business Journal