Stronger market benefits landlords
John Rebchook, Rocky Mountain News
Published July 19, 2007 at midnight
The Denver-area apartment market is showing the most strength since it collapsed after the terrorist attacks on Sept. 11, 2001.
And the apartment market is likely to get stronger in the second half of the year, with vacancies continuing to fall and rents continuing to rise, experts say.
That is good news for landlords and owners but not for renters, who have enjoyed bargain rents for the past six years.
The overall apartment vacancy rate in the Denver area fell to a six-year low of 6.2 percent, according to a report released Wednesday by the Apartment Association of Metro Denver.
The overall vacancy rate fell from 7.1 percent in the first quarter, according to the report authored by Gordon Von Stroh, a professor at the Daniels College of Business at the University of Denver.
"This is a benchmark quarter," Von Stroh said.
The last time vacancies were lower was during the second quarter of 2001, when 5.7 percent of the units were vacant.
And since then, 25,927 apartment units have been built in the metro area.
That makes the drop in the vacancy rate even more significant, said Steve Rahe, an apartment broker with CB Richard Ellis; and Kathi Williams, executive director of the Colorado Division of Real Estate.
The rising cost of construction and other factors will keep the lid on developers building a lot of apartments in the metro area, which will allow landlords to continue to raise rental rates, Williams said.
Vacancy rates peaked in the first two quarters of 2003, when the vacancy rate stood at 13.1 percent.
The average monthly rental rate for all apartments rose to $863.53 for the second quarter, compared with $843.85 in the second quarter of 2006 and $842.69 for the first quarter of 2007.
rebchookj@RockyMountainNews.com or 303-954-5207
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