For all you investors who are interested in rentals, there is still good news in the rental housing market!
While the rental vacancy rate among metro Denver’s single-family homes and condos rose slightly from the second to third quarter, it remains low enough to drive a year-over-year rent increase.
That’s according to the most recent report from the Colorado Division of Housing (DOH), released Monday.
The third-quarter vacancy rate rose to 3.4 percent, up from the second-quarter rate of 2.6 percent and the 2.9 percent rate from the same quarter in 2010.
“The small increase in vacancies reflects the fact that we’re continuing to see new inventory come onto the market,” Susan Melton, owner of Assured Management in Lakewood, said in a statement. “We’re still being approached by homeowners who can’t sell their homes, but don’t want to manage rentals themselves, and we also have established investor clients who are adding to the inventory of rental homes they already own.”
Adams County logged the area’s highest countywide vacancy rate at 5.2 percent. Douglas County was the lowest at 1.6 percent, with Broomfield not far behind at 1.9 percent for the third quarter.
Vacancy rates for the rest of the counties surveyed were:
- Adams, 5.2 percent.
- Arapahoe, 3.1 percent.
- Denver, 3 percent.
- Jefferson, 4.1 percent.
The average monthly rent of $1,049 dipped slightly from the second-quarter’s average of $1,063, but rose from the $1,041-level recorded in the third quarter of 2010. (A DBJ story on the second-quarter DOH vacancy report is here.)
“Year over year, these properties have experienced an increase in the average rent for 21 of the last 22 quarters,” Ron Throupe, assistant professor of business at the University of Denver and the report’s author, said in a statement. “However, most of those annual increases over the past three years have ranged from 2 to 3 percent. So, generally speaking, the rent growth is there, but it’s been relatively mild.”
Jefferson County logged the strongest rent growth, with an increase of 3 percent year-over-year. Adams County reported the biggest decline at 2.5 percent from last year’s average rent for the third quarter.
Average rents for all counties were:
- Adams, $1,093.
- Arapahoe, $1,007.
- Boulder/Broomfield, $1,601.
- Denver, $973.
- Douglas, $1,399.
- Jefferson, $1,011.
Average rents are not adjusted for inflation.
While average number of days on the market fell to an all-time low of 15.7 days in the second quarter, that number stood at 24.5 days in the third quarter – down from 36 days year-over-year.
The full report is available at the DOH website here.
Source: Dennis Huspeni
