Vacancies for Denver area rental homes fell to 4.6% during the third quarter of 2009, down from 5.2% during the second quarter, according to a new report from the Colorado Division of Housing. Average rents increased from $998 per month to $1,059, a jump of almost seven percent.
Rental housing, as defined in the survey, includes single family homes, townhomes, condos, duplexes, triplexes and fourplexes.
The strongest rental market in the region remains Jefferson County, where the vacancy rate is just 3.4%. Adams County (6.2%) and Douglas County (5.7%) have the highest vacancy rates in the seven county metro area.
While the $8,000 first-time buyer tax credit continues to pull qualified renters into the ranks of new home owners, population growth and tougher loan qualifying guidelines are helping to fill entry level rental properties, which remain in high demand.
A lack of new construction figures to increase the pressure for entry level housing in the years ahead, both for renters and first-time buyers.
It is my opinion that, prior to the introduction of the first-time buyer tax credit, investors basically had the entry-level purchase market to themselves. With so many first-time buyers jumping into the mix over the past 18 months, I have seen investors pull back, as values have risen in many areas by 10% or more in the past year.
That means less new rental inventory coming onto the market, which is one reason things continue to get tighter. There are still opportunities for investors, but it is more difficult and time consumptive to find the kinds of deals that were readily available at the start of 2008.
