The residential rental market continues to raise eyebrows. According to the Denver Post (August 1, 2004) the regional vacancy rates were between 4-5% from 1995 to 1qtr 2001. In early 2003 it a high of 11.6% and is now around 11.2%. In this same article we see a Denver Metro vacancy rate of about 9.7% over all. The Boulder/Broomfield markets had a 9.5% apartment vacancy rate according to the Apartment Association of Metro Denver (Denber Post, July 28, 2004). This same article shows we are also seeing a coninuting increase in home sales. This will continue to reduce the total number of rentals on the market and help improve the rental market.
As you can see from the chart we are in the midst of our busy rental season. Although many of the student rentals were leased last Spring for this Fall, there are still a number of student rentals on the market. We saw a spike last month and we are still about double the number of rentals compared to this time last year. The good news is the trend for advertised rentals shows a decline. We will hold judgement on whether the market is really improving until Labor Day. This is the traditional end of the busy season and the vacancy rate at that time will be telling.
Many of our clients and owners ask about the new housing at the CU Williams Village campus. If you drive into Boulder on Hiway 36 you will see a huge sign offering 2 months free rent. Is this indicative of the local student market? We believe they are struggling as students decline "dorm living." We asked a number of our student tenants about these apartments and many stated they were "...just new dorms. Who wants to live there again?" Although our student vacancy rate is 10% that is only 3 units out of 30. One must look at the data closely.
