Rental home vacancies hit new low

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If you want to rent a single-family homes, condo or other small property in the Denver area, you will face slim pickings – only two out of every 100 rental housing units in the metro are are vacant, shows a new state report.The Denver-area small property vacancy rate hit a new low of 2 percent at the end of the fourth quarter, plunging 63.6 percent from the 5.5 percent vacancy rate in the fourth quarter of 2009, according to the Colorado Division of Housing report released on Wednesday.  The fourth-quarter vacancy rate was down 31 percent from 2.9 percent in the third quarter of 2010. The fourth quarter’s vacancy rate is the lowest since the report was started in 2004. The Boulder/Broomfield area had a zero vacancy rate.

The average number of days on the market for home  rentals fell 29 percent to 38.2 days from 53.9 days in the fourth quarter of 2009.  The number of days on the market also fell from 2010’s third-quarter average of 36.0 days.

At the county level, the lowest vacancy rates were found in Douglas County and in the Boulder/Broomfield area. The vacancy rate was 0.9 percent in Douglas County, and there were no vacancies among the units surveyed in Boulder County.

The highest county-wide vacancy rate, found in Adams County, was 3.6 percent.

Vacancy rates for all counties surveyed were:

  • Adams, 3.6 percent
  • Arapahoe, 1.3 percent
  • Boulder/Broomfield, 0.0 percent
  • Denver, 3.0 percent
  • Douglas, 0.9 percent
  • Jefferson, 1.3 percent

Rents still flat

“Vacancies are certainly low and properties are renting up quickly,” said Susan Melton, owner of Assured Management in Lakewood. “In the past, the speed at which these homes rent up would tell us that the rents are too low, but it turns out that it’s been difficult to push rents right now.”

Median rents were largely flat across the metro area in spite of declining vacancies.

The median rent for single-family and similar properties rose year-over-year to $975.00 during 2010’s fourth quarter, rising 1.0 percent from 2009’s fourth-quarter rate of $965.00. The fourth quarter’s median rent was down 2.0 percent from 2010’s third-quarter median rent of $995.00. Median rents are not adjusted for inflation.

Reluctant landlords

“Part of the reason that it’s been hard to push rents is because new inventory continues to come into the market constantly,” Melton said. “We continue to see plenty of situations in which a homeowner has to move away, but decides that now is not a good time to sell. So, that property ends up being rented out and the inventory goes up, giving renters the opportunity to bargain hunt.”

Also, some real estate agents and other housing officials believe that demand for rental housing is being fueled by families who lost their homes either in a foreclosure or a short sale, in which the bank accepted less than the mortgage amount.

Median rents for all counties were:

  • Adams, $1,135.00;
  • Arapahoe, $920.00
  • Boulder/Broomfield, $1,307.50
  • Denver, $900.00
  • Douglas, $1,350.00
  • Jefferson, $895.00

The Colorado Statewide Vacancy and Rent Study is released each quarter by the Colorado Division of Housing. The report is available online at the Division of Housing Web site.

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John Rebchook

John Rebchook has more than 30 years of experience in writing and communications. As the Real Estate Editor for the Rocky Mountain News, he wrote about residential and commercial real estate for 26 years. He has won numerous awards for business stories and columns that he wrote, both as an individual and part of teams. In addition to real estate, he also covered economic development, banking and financing, the airlines, and cable TV for the Rocky. In addition, he was one of the original freelance writers for GlobeSt.com, covering commercial real estate for the Internet publication.

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