The vacancy rate had increased to 4.7% in the fourth quarter from 3.7% in the third quarter. Gordon Von Stroh, a business professor at the University of Denver, who authored the report, says that's no cause for concern. It's seasonal, he explains.
The weather, Presidential election woes and NASDAQ drops all had serve to distract apartment hunters, he adds. The same trend had been seen at year-end 1999 when vacancy had been 9.6%, up from 5.2% despite a large supply increase.
Meanwhile, the fourth quarter's average monthly rent had jumped $30.64 - or about 4% - to $792.67 from the third quarter. That equated to half of the 8% rise from the fourth quarter 1999, Von Stroh says.
Lauren Brockman, president of the apartment association and a partner with Bradley Apartment Homes, says renters should expect more spikes in their rent as leases are renewed because apartment owners are trying to recoup rising energy costs. Von Stroh notes apartment rents have risen about half as fast as housing prices in the metro area during the past year, which bodes well for the multifamily market.
Also in the fourth quarter, developers have added 2,565 in new inventory, about 45% of the 5,626 units added in all of 1999. That's nearly a 1% increase to the inventory of 254,024 units in Adams, Arapahoe, Boulder, Denver, Douglas and Jefferson counties, he says. In the past, many of those units would have become available in the spring, but community approvals are taking until the fourth quarter for delivery, Von Stroh says.
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