In contrast to recent research reports from Real Capital Analytics and NMHC, Northern Colorado is seeing relatively flat vacancies and increasing rents. On a national level, many very different markets get clumped into one category. For example, NMHC’s regions are Northeast, Midwest, South and West.
Where does Fort Collins fall? The West, which is reporting a 0.7% increase in vacancy over last quarter and 0.5% increase over the vacancy from a year ago. The vacancy for the West is at 7.7% while Fort Collins just reported 4.0% vacancy – a 0.8% decrease from a year ago (4.8% in Q1 2008).
While the Fort Collins market is doing very well, investors need to keep an eye on jobs. Without jobs, the multifamily market may start to show signs of decay. However, Fort Collins job losses are lower than the state and national averages and if you keep an eye on the job listings, there are many many jobs out there for the taking.
Construction in the region is at a stand still and I don’t anticipate any major projects coming out of the ground for 2-3 years – except for the occasional student housing project. This low construction, high barrier to entry region makes it ideal for real estate investors.
Investors are beginning to get antsy – tired of having their money sit on the sideline. And Northern Colorado is an attractive market that has displayed its ability to hold strong during one of the toughest economies in recent memory. With the eco-boomer generation entering the rental market along with positive immigration and population growth, apartment owners are looking at a very bright future.