Population growth in Colorado caused apartments to continue filling up in the third quarter, according to the Colorado Department of Housing.
Colorado apartment vacancies declined in the third quarter compared to the same period of 2006, while average rents dropped a few dollars.
The report includes Colorado markets, except for metro Denver. The Denver area's apartment market, with a third-quarter average vacancy rate of 5 percent, was covered in a separate report.
The vacancy rates for apartments in the rest of Colorado dropped to 5.7 percent in the period, from 7.2 percent for the third quarter of 2006.
All areas west of the Front Range saw average apartment vacancies of less than five percent in the third quarter, compared to the same period a year earlier. Grand Junction's vacancies dropped to 1.8 percent on average from 2.8 percent; Glenwood Springs' stayed even at 2.4 percent; and Durango's inched up to 4.1 percent from 3 percent.
"When you talk about demand for apartments, it relates directly to population growth," said Kathi Williams, director of the Colorado Division of Housing. "For the past several years, we've been adding more supply than we've had demand for. Since we quit building multifamily product, we're beginning to absorb existing inventory."
Gordon Von Stroh, business professor at the University of Denver and author of the report, added that out-of-state baby boomers renting apartments in Colorado as second homes also has contributed significantly to absorption of apartment units.
"Parents from Kansas City, Omaha and elsewhere in the Midwest are coming to Denver to be with their children and grandchildren," Von Stroh said. "They're keeping their home in Omaha and renting an apartment here."
Average apartment rents statewide dipped to $821.41 in the third quarter from $824.54 for the same period of 2006. They increased, though, from $805.94 in the first quarter.
Median rent decreased to $781.13 from $788.02 a year earlier. It increased from $765.12 in this year's first quarter.
Median, or middle, rent is the rent midway between the highest and lowest. Real estate professionals consider it significant because it's not skewed by the highest and lowest rents.
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source: bizjournals.com