Rental rates hike steadily with demand
GLENWOOD SPRINGS Looking for an apartment to rent?Have you tried Greeley?As local residents know, theres not an abundance of choices in Glenwood Springs, or the surrounding region.The Colorado Division of Housing reported Thursday that the city had a 2.2 percent vacancy rate during the first quarter of the year. The figure reflected generally tight rental housing availability along the Interstate 70 mountain corridor. Grand Junction had a 1.5 percent vacant rate, Eagle County, 2 percent, and Summit County, 2.8 percent.Up the Roaring Fork Valley, only 0.7 percent of Aspen apartments were vacant.In comparison to the tight mountain market, vacancy rates are 7.2 percent in Greeley, 12.8 percent in Loveland and 11.4 percent in Colorado Springs.The statewide composite vacancy rate was 7.5 percent. A 5 percent rate is considered to be the point of balance between rental housing supply and demand.Glenwoods 2.2 percent rate comes as no surprise to Judy Arnold, who has worked as property manager for Bray & Co. Real Estate in Glenwood Springs since 1994. She said it probably would have been even lower if she had had time to participate in the survey, but the rental market kept her too busy.I didnt even have an opportunity to sit down and fill out the information with them this year. We certainly have been just crazy. I have never seen it like this, she said.She said properties rarely stay vacant long enough to advertise them in the newspaper, and when her office does run an ad its likely to generate 20 calls within a few hours.With demand high and supply low, rental rates are going up, but even that isnt turning off would-be renters. Arnold remembers one month last year when her office sent out about 40 notices of rate increases and she braced for renters to give notice that they were leaving. Instead, they returned lease extension agreements faster than she ever had seen.Im thinking they looked around and they realized everything was going up. So the increases, they didnt blink at them and it continues to be that way, she said.She said she thinks property owners still are trying to figure out the highest rents the market can bear.Average rents in Glenwood for the first quarter were $736 for the first quarter, up only slightly from $721 a year ago but significantly higher than the $645 average two years ago.However, Glenwoods first-quarter average rental this year is below the statewide average of about $806, and is still not as high as the $818 average rate for Glenwood in the third quarter of 2001, before the citys last economic downturn began. And even 10 years ago, Glenwood renters were paying an average of $569. Rents really have been more stable, relatively stable, statewide, said Gordon Von Stroh, author of the new statewide report and a professor of business at the University of Denver. Theyve gone up some but not consistent with the Consumer Price Index for inflation.Kathi Williams, director of the Colorado Division of Housing, said much of Glenwoods rental housing is older. That helps temper rate increases because landlords cant offer more up-to-date amenities.She said property owners in bigger cities also tend to be more corporate and dollar-driven, whereas in smaller communities theres more frequently a personal relationship between landlords and renters, and as a result more hesitancy to raise rents.Arnold said when Bray is involved in raising rents, it offers more attractive terms to entice existing tenants to stay, and even more incentives if they sign a new lease.We know that there will be turnover expenses and its just in everyones best interests to try to keep them, she said.Williams said property owners tend to offer fewer incentives to prospective renters in tight housing markets, but those renters also can face repercussions in areas beyond price. Those with less credit-worthiness may be more likely to be rejected, and the same can be true for smokers and pet owners.Glenwood Springs and the surrounding area continue to suffer from a lack of much new apartment construction. Williams thinks that may be related in part to a history of booms and busts in the region. It can be safer for developers to build and sell single-family homes during a boom than to build and hold rental units that are vulnerable to another possible downturn.Arnold said she lived in Aspen during the down-valley regions oil shale boom, which ended in the early 1980s.I missed that whole cycle. I dont know if that was similar to this or not but Ive never seen it this way. Its great for the landlord. I hope the economy is good for the tenants, too, she said.
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