Apartment vacancy rate drops to three-year low

Cindy Hoppe

Phil Castle, The Business Times

Apartment vacancy rates in Grand Junction have dropped to their lowest levels in three years, according to the latest results of a quarterly survey.

And without the substantial construction of new apartments, the situation is likely to persist for a while, said Cindy Hoppe, manager of Bray Property Management in Grand Junction.

According to the latest results of a survey conducted for the Colorado Division of Housing, the average apartment vacancy rate fell to 5.5 percent during the second quarter. That’s the lowest level since the rate stood at 4.5 percent for the second quarter of 2009.

A vacancy rate of 5 percent is considered an equilibrium between supply and demand.

While Hoppe disputed survey results that pegged the vacancy rate at 10.4 percent during the first quarter because of a smaller survey sample size, the latest rate corresponds more closely to what she’s observed in the market. “This time I’m in agreement.”

If anything, rental activity has increased since June as part of a seasonal peak that occurs before the start of the school year, Hoppe said. “It’s only gotten stronger in the last month.”

For the second quarter, the apartment vacancy rate in Grand Junction was lowest for one-bedroom units at 4.1 percent and highest for three-bedroom units at 24 percent.

The apartment vacancy rate ranged from 2.8 percent for small buildings with two to eight units to 8.3 percent for large buildings with more than 100 units.

The average monthly rent in Grand Junction rose nearly $50 to $674.78 in the second quarter, according to the survey results. That’s the most since monthly rents hit $674.31 in the third quarter of 2009.

Hoppe said most landlords no longer offer rent concessions — a month of free rent for signing a long-term lease, for example. However, she said she’s observed only what she described as “marginal” increases in monthly rents.

According to the survey, average monthly rents during the second quarter ranged from $533.39 for one-bedroom units to $839.40 for three-bedroom units.

Across Colorado, average apartment vacancy rates ranged from 3.5 percent in Fort Collins and Loveland to 6 percent in Colorado Springs during the second quarter.

The overall composite state vacancy rate for those areas surveyed and the Denver metro area fell to 4.9 percent in June, down from 5.6 percent in December.