Most people who lose their homes to foreclosure become renters again. That’s happening so swiftly in Denver and other parts of Colorado that vacancy rates for apartments have dropped from more than 10% a few years ago to about 5% today, says Williams, the Colorado housing official. The nation’s apartment vacancy rate dropped from 6.9% in 2003 to 5.6% in 2007, according to research by Marcus & Millichap Real Estate Investment Services.
“We’re seeing a lot more stress on the rental market,” Williams says. “If more supply doesn’t come in, we’re going to see rents rise.”
That’s happening already: The average rent that landlords sought for an apartment in Denver in 2007 rose 3.9% over the previous year, according to Marcus & Millichap.
I’ve been seeing this symptom (the rising scarcity of rental units due to foreclosed homeowners becoming renters) manifest itself here modestly in San Diego.
