Denver-area rental-home vacancies up in Q3, but still low
December 2, 2009 3:18 PM ETPaula Moore
Vacancies for Denver-area rental homes were up this year’s third quarter year over year, but were still relatively low, and average rent rose because of a greater quantity of pricier housing product.
Based on third-quarter 2009 data from the Colorado Division of Housing, some metro-area real estate experts think the rental housing market is headed in a positive direction for landlords.
“It’ll be a while before things normalize, but things are starting to look up for renters and owners,” said Gordon Von Stroh, business professor at the University of Denver and author of the rental housing report.
“Vacancies are down and days on the market fluctuates depending on type of property, but we’re still headed in the right direction,” said Bob Alldredge, owner of Jericho Properties Realty LLC of Lakewood and past president of the National Association of Residential Property Managers’ Denver chapter. “By next spring, landlords ought to have a more positive position — not strong, but better than it has been.”
Vacancies in rental housing increased to 4.6 percent in this year’s third quarter from 3.4 percent during the same period of 2008, according to the housing division report. But the figure was down from 5.2 percent in this year’s second period, which real estate experts consider positive.
Rental housing used for the report included single-family homes, townhomes, condos, duplexes, triplexes and fourplexes.
Vacancy rates reached record lows of 2 percent to 4 percent in 2007 and 2008.
Average rent rose to $1,059.77 per month last quarter from $998.37 for the same period in 2008, and from $1,016.35 in this year’s second quarter.
Rents have been basically flat since 2004, according to the housing division.
Arapahoe County and the Boulder/Broomfield area have some of the metro area’s highest third-quarter rent growth, largely because of the new, higher-priced rental housing that has come on the market. “Homes that don’t sell are being rented out, and they’re more expensive properties than what has been in the inventory,” Alldredge said.
Another positive indicator for the rental housing market is that the average number of days a property is on the market before being leased has dropped to 41 days from 49.5 days. “That’s the lowest it’s been since we started the survey,” said Von Stroh. The housing division launched the survey in 2003.
Of the six property categories, three types — single-family homes, townhomes and triplexes — had more average days on market compared to 2008’s third period. Condos, duplexes and fourplexes had fewer DOM — with DOM for condos dropping from 125.1 to 33.9 year over year.
From this year’s first to third quarters, average DOM decreased in all property types but two — single-family homes and fourplexes.
The Colorado Division of Housing compiled the rental housing data with the Denver Chapter of the National Association of Residential Property Managers. Other findings from the third-quarter rental housing survey include:
• The highest vacancies were in Adams (6.2 percent), Douglas (5.7 percent) and Boulder/Broomfield (5.7 percent) counties.
• The lowest vacancies were in Jefferson County with 3.4 percent, followed by Arapahoe (4.3 percent) and Denver (5.5 percent) counties.
• Highest average rents were in Boulder/Broomfield ($1,661.03), Douglas ($1,377.65) and Arapahoe ($1,124.45) counties.
• Denver County had the lowest rent average at $945.47, followed by Jefferson ($981.04) and Adams ($1,041.29) counties.
• Median rent was $975 metrowide. Median rent is the middle figure between highest and lowest rents, and is considered by some real estate experts to be a truer rent measure than average because it’s not skewed by highest and lowest rates.
• Median rents by county include: Adams, $1,050; Arapahoe, $950; Boulder/Broomfield, $1,476; Denver and Jefferson, $895; and Douglas, $1,350.
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