Multifamily vacancies in Denver are plunging as a combination of new jobs and decreasing homeownership boosts the market.
Research by Marcus & Millichap suggests that the vacancy rate may drop to 4 percent this year, which would be the lowest level posted since 2000. Household formation in the city has been above average throughout the recession, according to the firm, despite elevated foreclosures.
The projected driver of change in 2012 is employment growth, however, expected to reach 1.3 percent for the year. The addition of more than 15,000 jobs would almost double the combined growth experienced in the past two years, as the city attracts employers in the technology and energy sectors.
About 2,500 new units are expected to be added to the city's multifamily sector this year, compared to 838 in 2011. Despite this, Marcus & Millichap reports projected growth of 3.7 and 5.2 percent in asking and effective rents, respectively. Rental property management firms in the area may benefit significantly from the current conditions and predicted developments during 2012.