According to a report released by the Colorado Division of Housing last Wednesday apartment vacancies were low all across the Front Range.
While vacancies continued at low numbers rent prices continued to increase. “The Fort Collins market has been tight for years…Greeley has gone from being a market with only moderate demand to a very tight one” said Ryan McMaken an economist with the Colorado Division of Housing. The Denver Post reported that in the third quarter, the vacancy rate was 2.8 percent in the Fort Collins-Loveland area and 1.3 percent in Greeley, which was the lowest rate reported in Greeley since 1995.
The Denver area vacancy rate was also measured, and was shown to go up from 4.3 percent to 4.4 percent during the third quarter, reported The Denver Post. The lower the vacancy rate, the higher the demand for rentals. With more demand rentals rates increase. McMaken added that rents are higher than ever and that vacancy rates are sitting at a 12-year low.
During the economic downturn building new apartments slowed drastically. With the current demand for rental units new apartment construction is at a rate not seen in several years. In the 3rd quarter of 2013 there were 15,612 apartment units under construction in the seven counties of Denver metro. Denver proper led all counties with 8,090 projects underway.
The majority of the new construction is urban and transit oriented along light rail lines and bus routes. There may be a tendency to be concerned that excessive construction could weaken the rental market. Given the low vacancy rate at 4.4%, when a balanced rental market vacancy rate is 5-7%, there is plenty of room of extra units to be absorbed by the strong rental demand.
If you are on the hunt for a new apartment your search may be just beginning. Many predict that the vacancy rates will stay the same and that rental prices will continue to rise due to demand. The plus is that you may have a few more new apartment units to pick as your new home.
For more information on rental vacancies and rental prices visit: Colorado Division of Housing