Vacancy rate holding steady at 6.3 percent
Grand Junction’s rental vacancy rate of 6.3 percent in the second quarter of 2011 was unchanged from the first quarter, according to a Colorado Division of Housing vacancy report released Tuesday.
Grand Junction is far from returning to pre-recession vacancy rates of 1 to 2 percent, according to Property Manager Cindy Hoppe of Bray Property Management. But Hoppe is confident the area is unlikely to return to vacancy rates above 10 percent, like those recorded at the end of 2009 and the beginning of 2010.
Hoppe said she has seen positive signs in the third quarter. Following a decline in new leases in June, potential tenants have kept her busy throughout July and August.
“We have been just buzzing,” she said. “Everyone wants to get settled before school starts.”
More interest hasn’t spurred many property owners to increase rents, Hoppe said.
“Even when times were good our rent didn’t go up that much. A lot of our owners aren’t big portfolio investors; they’re smaller owners, so they have more of a stake in it. People are afraid to raise rents,” she said.
The Division of Housing report offered mixed messages about local rental rates. The median rent in Grand Junction increased by $6.70 a month year-over-year in the second quarter, but the average rent decreased year-over-year by $3.37 a month.
Stable rents can be a mixed blessing, according to Colorado Division of Housing spokesman Ryan McMaken. A tenant may appreciate being able to pay less, but developers are less likely to construct new buildings if they aren’t likely to get much rent to cover their construction costs.
McMaken said construction is beginning to pick up on the Front Range, in cities where rents are higher and unemployment rates are lower.
“Ninety-five percent of multifamily housing permitting this year has happened in Denver, El Paso and Larimer counties,” McMaken said.
Without new buildings, rents aren’t likely to rise anytime soon. “Unless they’re tip-top properties, property owners know they can’t raise rents” and expect people to stay, McMaken said.