Vacancy up, rents down in Grand Junction

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Grand Junction continues to be the tightest rental market for apartments of any metropolitan area in Colorado. But more doors are swinging open to prospective renters.

Vacancy increased from 4.0 percent to 4.5 percent in the second quarter of 2009 in Grand Junction, the highest local vacancy rate in nearly three years, according to a report released Tuesday by the Colorado Multi-Family Housing Vacancy & Rental Survey.

The average Grand Junction rental rate dipped to its lowest level in a year, from $680.35 in the first quarter to $628.78 in the second quarter. The average price for a one-bedroom apartment was $535.55, while a two-bedroom with one bath cost $662.66 on average, and a two-bedroom with two bathrooms averaged $747.79. The average three-bedroom apartment was rented for $807.69 a month last quarter.

One-bedroom, one-bathroom apartments were the most available in Grand Junction in the second quarter, with 33 vacancies. A total of 80 apartments were available June 10, the day survey author and University of Denver professor Gordon E. Von Stroh interviewed Grand Junction property managers about the number of their vacant rentals and the rent. The survey did not include deed-restricted rentals.

Von Stroh said more unoccupied rentals in Grand Junction doesn’t mean the area is being abandoned. He considers 5 percent vacancy an equilibrium rate, meaning there’s still more demand for apartments in Grand Junction than there is a desire for property managers to drop rental prices to attract customers. 

“It still indicates Grand Junction is a healthy market,” he said of the 4.5 percent rate.

Some landlords are dropping monthly rates, though, as evidenced by the $628 average.

The average likely dropped because properties going for $800 or more a month have seen a price adjustment, said Cindy Hoppe, a Bray Properties property manager. Hoppe said the adjustment in rent and vacancy “needed to happen,” but she sees a potential rebound coming in a year.

“I think by spring and summer we’ll start seeing things improve” as far as finding renters, Hoppe said.

Landlords may be having trouble filling higher-end rentals, but people are mostly holding onto the affordable-housing units.

“When you have a tight situation still at 4.5 percent, people tend to stay in affordable housing,” Colorado Division of Housing spokesman Ryan McMaken said. “You’re going to need more quarters of the vacancy rate increasing in order to start seeing affordable housing become available.”

The housing survey showed vacancies increased from:

• 4.4 percent to 9.9 percent in Fort Collins/Loveland;

• 7.4 percent to 8.5 percent in Pueblo; and

• 8.4 percent to 9.1 percent in Greeley.

The vacancy rate decreased from 11.7 percent to 9.8 percent in Colorado Springs in the second quarter.

Average rents were:

• $825.03 a month in Fort Collins/Loveland;

• $717.25 a month in Colorado Springs;

• $629.01 monthly in Greeley; and

• $538.14 a month in Pueblo.

Denver, which had a 9 percent vacancy rate in April through June, has rental-market information compiled separately from the survey.


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