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Vacancy Rates Drop, Rental Prices Rise in Colorado

May 23, 2011

Vacancy rates across Colorado have dropped significantly, and the prices are rising in return. Northern Colorado has seen a significant improvement in the rental market, with a drop in vacancy from 4.9 percent last year, to 4.0 percent this year. Metro Denver saw a decrease in vacancy from 6.6 percent to 5.5 percent. On the Western Slope, Grand Junction saw the largest decrease in vacancy statewide with a drop from 11.6 percent to 6.3 percent. Both Greeley and Colorado Springs are at nine-year lows.

What exactly do these numbers mean? For the most part, the rental market is tight and/or tightening. Gordon Von Stroh, professor of business at the University of Denver who conducts the survey twice a year, said that equilibrium in the rental market is a 5 percent vacancy rate, so 4 percent in Fort Collins-Loveland is indicative of a tight market. Landlords can increase rent without running the risk of not filling spaces.

In terms of rent, Fort Collins- Loveland saw the largest increase in rent statewide. With a 7.5 percent increase, the average rent has risen from $837 to $901. New apartment complexes such as Lake Vista Apartments in Loveland and [in progress] Caribou Apartments of Fort Collins are filling up fast, with a 35 percent occupancy rate and 40 percent leasing rate. In Metro Denver rental prices increased 3.9 percent from $840 to $873. Meanwhile, rent in Grand Junction fell 1 percent, and Greeley maintained its prices.

The falling vacancy rates and increasing rent prices are indicative of an owners market, where demand is attempting to exceed supply. This growth could be hindered by the unemployment rate, although some experts believe that the quality of life and number of people who are moving to Colorado will maintain the growth seen thus far. Rental companies have also noted that the people who are moving into Northern Colorado is not an influx of students but rather people who are moving from one location to the next, also known as the standard renter. This provides stability within the market and ensures that vacancies will not rise again.

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One Comment leave one →
  1. June 4, 2011 1:34 am

    Your blog is great. Very valuable information Ben.

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