The overall vacancy rate for Denver-area rental single-family homes, condos and other individual properties has fallen to a second-quarter record low of 2.6 percent, according to a Colorado Division of Housing report released today.
The current vacancy rate is 31.6 percent lower than the 3.8 percent rate in the second quarter of 2010. However, the vacancy rate was even lower in the first quarter of this year, when it stood at 1.4 percent.
The vacancy rate varied among different types of properties, although only triplexes reported a vacancy rate above 4 percent. The vacancy rate in detached houses was 2.3 percent, and it was 3.7 percent in rental condominiums. Duplexes had the fewest vacancies at 1.2 percent, while triplexes reported a vacancy rate of 5.1 percent.
“There is very solid demand for these types of properties right now,” said Robert Alldredge, principal at Jericho Properties Realty. “Although we continue to see new properties entering the market as rentals, I’d expect to see vacancies remain at low levels for at least the next 12 to 18 months.”
The average number of days on the market for single-family rentals and similar properties fell from 47.2 days during the second quarter of 2010 to a new all-time low of 15.7 days during the second quarter of 2011. The number of days on the market also fell from 2010’s first-quarter average of 29.7 days.
“The number of days on the market is really quite low right now,” said Susan Melton, owner and broker at Assured Management Inc. “Until recently, many of these units still had rather low rents in spite of high demand. So, during the second quarter, they were being picked up very quickly by renters eager to get a lease in place. As rents move up, we’ll likely see the number of days on the market move up again.”
At the county level, the lowest vacancy rates were found in Denver County and in the Boulder/Broomfield area. The vacancy rate was 1.2 percent in Denver County, and there were no vacancies among the units surveyed in Boulder County.
The highest county-wide vacancy rate, found in Adams County, was 4.4 percent.
Vacancy rates for all counties surveyed were:
- Adams, 4.4 percent.
- Arapahoe, 2.6 percent.
- Boulder/Broomfield, 0.0 percent.
- Denver, 1.2 percent.
- Douglas, 2.1 percent.
- Jefferson, 3.7 percent.
The average rent in metro Denver for single-family and similar properties rose year-over-year to $1,063 during 2011’s second quarter, rising 3.5 percent from 2010’s second-quarter rate of $1027. The first quarter’s average rent was up 2.3 percent from this year’s first-quarter average rent of $1039. Average rents are not adjusted for inflation.
“We’re now seeing more owners able to get increases of 3 to 5 percent in the rent when new leases are signed,” Melton said. “That’s not an enormous amount of growth, but it is more growth than we’ve seen in recent years. Many small-property owners are reluctant to push rents too much since turnover can still be very costly for an owner who’s renting only one or two houses.”
Average rents for all counties were:
- Adams, $1132.
- Arapahoe, $1077.
- Boulder/Broomfield, $1531.
- Denver, $1007.
- Douglas, $1390.
- Jefferson, $1007.
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 economics site at this link.
Contact John Rebchook at JRCHOOK@gmail.com