Colorado Vacancies Rose as Foreclosed Homes Sale Lists Fell

by Peter Vernon on States

Both apartment vacancies and rents across Colorado, particularly outside the Denver metro area, increased in the first quarter compared to last year’s first quarter, according to a study from the Colorado Housing Division. The increase occurred despite a decline in foreclosed homes sale lists compared to last year’s first quarter lists.

The vacancy rate across the state increased to 8.5 percent in comparison to last year’s first quarter level of 6.1 percent.

Gordon Von Stroh, the University of Denver business professor who wrote the vacancy and rent report, said high vacancy rates correlate strongly to high jobless rates.

Meanwhile, foreclosure filings dropped by eight percent to 10,745, compared to the 11,634 filings in last year’s first quarter. The number of homes added to foreclosed homes sale lists also dropped to 4,354, a decline of 26 percent from the 5,899 units added to foreclosed homes sale inventories in last year’s first three months.

The average rental rate per month for apartments in Colorado also increased to $844.39, compared to the average rent in last year’s first quarter.

Median rent rose to $796.13 from the median of $784.22 in last year’s first quarter. Median rent refers to the middle point between the highest and lowest rates and is preferred by real estate analysts over average rent because they say it is a more accurate representation of rates.

The Housing Division also reported that there is negligible new apartment construction across the state because of lack of financing for apartment construction. The effects of foreclosed homes sale inventories are also undermining construction projects.

In contrast to the statewide trend, the vacancy rate in the area covered by Fort Collins and Loveland declined from 5.2 percent in last year’s first quarter to 4.4 percent in this year’s first quarter. The vacancy rate decline was driven by the progress of Colorado State University and increases in jobs in the medical and renewable energy sectors.

Average rent for apartments in Fort Collins and Loveland rose to $860.81, compared to the $760.21 average in last year’s first quarter.

The Housing Division study also indicated that apartment vacancies increased in most Front Range metro areas, with Colorado Springs having the highest rate at 11.7 percent. Vacancies in Pueblo and Greeley increased by 7.4 and 8.4 percent respectively.

With regards to foreclosures, Housing Division Director Kathi Williams said that unemployment continues to have negative effects on housing, but she says that the pace of foreclosed homes sale inventories in Colorado is stabilizing.

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