Apartment vacancies decline

The Colorado Springs-area apartment vacancy rate fell to 9 percent in the first quarter of 2008, down from the fourth quarter of last year and the first quarter of 2007, according to a new survey from the Apartment Association of Southern Colorado. But the area's economic vacancy rate is falling, too -- a sign that renter incentives are poised to disappear. The economic vacancy rate takes into account the percentage of vacant apartments and combines that figure with rent discounts and other concessions. In the Springs area, the economic vacancy rate in the first quarter averaged 21.3 percent. The figure was unchanged from the fourth quarter of last year, but was down sharply from 25.6 percent in the first quarter of 2007. The economic vacancy rate typically increases when there are plenty of apartments available to rent, and it declines as the apartment market improves. In late 2004, when the single-family home industry was going strong, mortgage rates were low and thousands of people were buying houses, landlord and apartment owners had to offer plenty of incentives. As s result, the economic vacancy rate soared to 30 percent in the fourth quarter of 2004.