Metro Denver vacancy rates dropped during the fourth quarter of 2012 to 1.7%, according to the Colorado Division of Housing. This was down from the 2.3% vacancy rate the previous quarter and a 2.1% rate a year earlier.

This includes vacancies in for-rent townhouses, single-family homes and other small properties across the Denver metro.

"When a rental house becomes vacant, we're quickly getting multiple offers from people who want to rent the house," said Robert Alldredge, owner of Jericho Properties Realty in Lakewood. "The market is as tight as I can remember, and I’ve been doing this for 30 years."

Despite vacancies disappearing and renters competing, the average rent for rental houses, townhomes and other small properties are showing modest growth. 

The average single-family rental property rent price in Denver was up only 1.9% year-over-year and actually dropped from the previous quarter. The average rent price in the fourth quarter of 2012 was $1,083, up from $1,062 year-over-year, but down from the previous quarter’s $1,090.

"The low growth rate in the average rent is deceptive, and is kept down by the fact that many owners are still afraid to push rents to the point that the renter leaves," said Lyle Haas of Colorado Realty and Property Management.

"Many owners could push rents more than they are, and I’m surprised at how high our renewal rate is right now, even when we’re asking for some big rent increases."