John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... This headline may have caught your attention.
But it’s no call to be alarmed.
The housing rental vacancy rate in the Denver area rose to 3.6 percent in the first quarter, compared with 2.7 percent in the first quarter of 2008. A little more than a one percentage point increase doesn’t sound like much, but when dealing with such small numbers it is actually a large percentage change – 33.3 percent, to be exact.
But Gordon Von Stroh, the professor with the Daniels School of Business at the University of Denver, who authored the report for the Colorado Division of Housing, is not concerned by the big percentage increase. For one thing, a 5 percent vacancy rate is generally considered a market in equilibrium where supply and demand are balanced, and the vacancy rate is still well below 5 percent.
Still, the housing rental market is different than the traditional market, Von Stroh notes.
“If you have 10 homes for rent and two of them are empty, that can be financially devastating,” Von Stroh said. “But if you have 100 multifamily units and three of them empty, that is not a big deal and is expected at any given time.”
And while the owner of a large apartment community can offer incentives such as free rent, the individual owner typically quickly drops the price of a home to rent it, Von Stroh said.
