In Denver, the apartment vacancy rate fell in the third quarter, pushed downward by hurricane evacuees and former homeowners who had been foreclosed upon. The rate droped to 7.7%, as compared to 8% for the second quarter. (The Denver Post, October 28, 2005).
The 2005 rental season is about over. This was a year of rapid shifts up and down. The year started off slow with higher than normal vacancy rates. Keep in mind the market has not been normal for a few years. We saw increased numbers of potential renters early in the Spring and into Summer with a few areas getting increased rents. By mid-July the market had shifted down again and many area saw rents stagnant or even down a bit. In mid-August the vacancies were still high and rents were dropping to find tenants before Labor Day. Although the hurricane refugees did help some segments these were primarily in closer to Denver than the northern segments (i.e., Broomfield, Boulder, etc.)
Overall, the market was about the same as last year. Still depressed and very much a renter's market. We expect the very high number of foreclosures filed in October to help keep the vacancy rates higher than normal. A number of these will end up in the hands of investors and reenter the market as rentals.
Expect the 2006 market to be much the same as this year. Owners and managers will need to adjust quickly to the changing market. Those of us in the management business will be looking at new and creative ways to attract and sign tenants. Personalized Management is already taking steps to ensure we are top of this upcoming market. We will have to wait and see what the market brings next season.
