Grand Junction vacancy rate rises to 7.5 percent
The vacancy rate for Grand Junction rental property more than tripled from the third quarter of 2008 to the third quarter of this year.
As of September, 7.5 percent of rentals remained open in Grand Junction, up from a 2.4 percent vacancy rate a year before.
Known in recent years for having one of the lowest vacancy rates of any Colorado metropolitan area, Grand Junction now has a higher percentage of openings in its rental market than Denver (7.4 percent), Fort Collins (5.9 percent), Greeley (7.1 percent) and Loveland (4.3 percent).
At 12 percent, Pueblo has the highest vacancy rate measured by the Colorado Division of Housing in its third-quarter vacancy report. Aspen had the lowest, 2.7 percent.
Since rental home and apartment construction is low compared with recent years, the vacancy-rate jump likely correlates with a rough spot in Grand Junction’s economy, Colorado Division of Housing spokesman Ryan McMaken said. Unemployment rates rose all year in Grand Junction until August and settled at 8.5 percent in September, higher than any other metropolitan area in the state.
“It’s a pretty simple case of being sensitive to the economy,” McMaken said.
Other parts of the state, especially on the Front Range, started to see improvements in vacancy and unemployment rates during the second quarter, McMaken said. Some Grand Junction residents may be moving to the Front Range because of job growth, he said.
While vacancies rose, so did the median rent in Grand Junction, from $670.24 in September 2008 to $680.37 in September 2009. The average rent went from $670.24 to $674.31 during that time. The rent increase may seem counter-intuitive for people trying to move property, but Gordon E. Von Stroh, who authored the most recent Colorado Division of Housing report, said the increase could have been worse.
“Certainly expenses, such as utilities, insurance and the price of managing an apartment community, has continued to go up, probably more than $4 (per month),” Von Stroh said.
Two-bedroom, two-bathroom rentals had the lowest local vacancy rate, 4 percent, in Grand Junction, but nearly one-quarter of all three-bedroom rentals were empty in September. That may be because many people wishing to sell their home have given up and turned their property into a rental, according to Bray Property Management Manager Cindy Hoppe.
The increase in total vacancy rate, though, is not simply due to more properties in the rental market, Hoppe said.
“A lot of people are moving in together, getting roommates, younger kids are moving back in with their parents,” she said.
Hoppe said people also are moving out of the area. She said more security deposits than usual are being sent out of state to former renters.
The people who are moving into rentals have either held on to their jobs or snagged a position in the medical field, Hoppe said. She expects vacancy rates to improve as the local economy improves and when winter, which is a slow season for moving, has passed.
Tax incentives and low interest rates may help fire up home buying, something McMaken said already is happening.
More buying could also mean more renting, Hoppe said.
“Everything just starts moving, which is good for everyone,” she said.