Rents are rising and competition for apartments is getting stiffer, a new state report shows.
Rental property is like any other commodity, from bread to crude oil, said Clark Haggard, a housing counselor for Housing Solutions of the Southwest. Supply and demand drive the price.
According to a report released Thursday by the Colorado Department of Local Affairs housing division, apartment vacancies in the state now are at the lowest level since 2001, 5 percent. Thats compared with a 5.5 percent vacancy rate at the same time last year and a 5.2 percent vacancy rate in the second quarter of this year.
In Durango, the report shows vacancy rates have increased slightly, from 3.9 percent in the third quarter of 2010 to 4.7 percent in the third quarter this year, though the figure reflects an anomaly caused by leasing issues in one or two local apartment complexes, said one of the reports authors, Gordon Von Stroh, a business professor at the University of Denver.
Management in those complexes has affected the overall vacancy rate there, Von Stroh said.
Von Stroh said he could not release the names of the apartment complexes that affected the reports results.
If the referenced apartment buildings were removed from the analysis, Durango would also have seen apartment vacancy rates significantly decrease, he said.
Area real-estate agents and apartment-complex managers confirmed theyre seeing demand rise and vacancy rates fall for local rentals.
An employee for Real Property Group in Durango, which manages Animas View and Riverview Apartments, said both buildings are full this month, and they typically can fill vacancies the same month they arise.
There are pros and cons to the changing rental market trends, local and state officials said.
Average rents in Durango have increased about $15 monthly in the last year, or 1.6 percent, to $851, the Colorado Multi-Family Housing Vacancy & Rental Survey showed. Statewide, rents rose 3 percent over the last year, the report said.
For struggling low-wage renters, this makes it harder to land an affordable lease or any lease at all. Students, low-income workers, people with blemished credit or rental histories and people with pets will continue to encounter more challenges in securing an apartment, Von Stroh and Haggard said.
Landlords can be a lot more selective when vacancy rates are low, Von Stroh said.
Haggard agreed, saying at least one management company in the area has its credit score criteria set so high that its impossible for most lower-wage workers in town to land a lease with the company.
Conversely, investment is spurred when rents and demands rise, state and local officials said, affecting the building market and local economy overall.
In fact, the latest rental market trends already are bringing new projects and investments to the area, said Jarrod Nixon, president of the Durango Area Association of Realtors.
We are beginning to see investors returning to the market due to higher returns that make Durango a better long-term investment, Nixon said.