For those folks involved with our interested in Colorado Real estate investing, here is another positive trend in rental vacancies in the Northern Colorado rental market. We have been seeing similar number in the Denver Metro rental market.
I am also hearing a lot of anecdotal evidence from our investor clients...most are reporting that any vacancies that they are marketing are flooded with calls and emails from motivated tenants.
It's a great time to invest and own rental real estate in the the Northern Colorado market!
Rob Kelly
Twitter: RobKellyCo
Rental market tightens up; rates rise in Northern Colo.
BY CARI MERRILL
CariMerrill@ coloradoan.com
Thanks to foreclosure fears, the rental market in Northern Colorado is tightening up and driving up rental rates, according to a the latest vacancy and rent report released Thursday by the Colorado Division of Housing.
Fort Collins' vacancy rate fell from 4.9 percent in the third quarter of 2007 to 4.2 percent in the third quarter of this year, which ended Sept. 30. Loveland saw a dramatic drop from 5.9 percent to 3.5 percent during the same period.
Given the current housing market, fear of job losses and foreclosure woes, renting can provide more stability, said Carrie Ann Gillis, former president of the Colorado Apartment Association and property manager for New Colony Apartments.
And while the healthier Northern Colorado economy is bringing new workers into the region for high-tech jobs, those new residents are opting to rent rather than buy, a decision that creates additional pressure on the rental market, said Stephen Wessler, vice president of Red Stone Agency Lending.
"With everything going on in Fort Collins, it points to a very healthy economy," he said. "In order to maintain that health, new housing opportunities need to be developed, particularly on the rental side."
Construction of new apartment buildings in Fort Collins has been the lone bright spot in residential construction this year.
Southeast Fort Collins saw the most tightening in the rental market, posting a 2.6 percent vacancy rate for the third quarter compared with 3.2 percent a year ago.
Much of that growth came from service industry jobs popping up along the Harmony Corridor, Gillis said.
Living in a predominately residential area, families in southeast Fort Collins facing possible foreclosure want to their children in the same schools, which means they are looking for rentals in the same part of town.
"When the mortgage industry was such that you could get the loans, those were first-time- or second-time-homeowner families, and now they're in rentals instead," Gillis said, adding that there's an increase in the number of single-parent families moving into rentals.
Decreasing vacancy rates in the city are contrary to what the rest of the state is experiencing with the overall vacancy rate in Colorado increasing to 6.6 percent during the third quarter of 2008, up from 5.7 percent during the same time last year. The highest rates are in Colorado Springs and Pueblo, which reported 9.2 percent and 6.8 percent respectively.
The increasing demand for rental housing is driving up rental rates.
The Fort Collins-Loveland area reported the most significant increase in rents across the state, jumping from $757.17 during the third quarter of 2007 to $854.38 during the same quarter this year.
Much of that growth in rent comes in the northwest part of Fort Collins, which includes mostly student housing, where average rents increased to $1,002.13 for the third quarter, up from $753.16 for the same quarter last year.
Gillis said it comes from apartment complexes such as Ramblewood including all utilities into their leases rather than having tenants pay it separately.
Additional Facts Vacancy rates
Fort Collins
> 4.2 percent: Q3 2008
> 4.9 percent: Q3 2007
Loveland
> 3.5 percent: Q3 2008
> 5.9 percent: Q3 2007
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