For the past few years, the main reason renters have left apartment complexes in the metro area is to buy homes. But in the first quarter, Denver-area apartment vacancy rates fell to 4.5% from 4.7% in the fourth quarter. In the first quarter of 2000, the vacancy rate stood at 5.1%.
The latest numbers show the lowest first-quarter vacancy rate since the 3.9% in 1995, according to the quarterly Denver Metro Apartment Vacancy and Rent Survey.
But the total supply of apartment units in the six-county area increased in the first quarter of this year from 1995 by 34,431 units to 255,139 from 220,708, a 15.6% increase.
Eric Tupler, a vice president of L.J. Melody & Co., says the '"quick assumption'" would be that renters would leave apartments for homes. But it didn't happen, he theorizes, because home prices are rising faster than rents.
The median monthly rent in the Denver area was $759.61, compared with $707.67 during the same period in 2000. The average monthly rent was $796.86, only a $4.19-per-month increase from the average rent in the fourth quarter.
In the first quarter of 2000, the average rent was $746.62. Even a 10% drop in mortgage rates from last year isn't enough to convince a lot of renters that they are better off owning, he says. If the economy wasn't showing signs of slowing, more renters might be buying homes, he says.
But with an estimated one million sf of sublease space on the suburban southeast market, that means roughly 4,000 people along that large corridor could be looking for a job, he estimates. When people are worried about job security, they don't buy homes, he says.
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