Metro Denver apartment rents went up just in the past year, but vacancies are tightening
Metro Denver’s apartment rents are almost flat with year-ago levels, but the supply of vacant units has slipped back below pre-pandemic levels, according to the latest Denver Metro Apartment Vacancy and Rent report.
Measured year-over-year, rents are essentially flat, with a gain of $7.89 in the average rent and $7.85 in the median rent. The region’s apartment vacancy rate fell from 5.8% in the fourth quarter to 5.5% in the first and is down from a 5.9% rate early last year.
The average apartment rent across the metro area was $1,543.59 in the first quarter, up $33.33 from the fourth quarter’s average rent of $1,510.26. The median or mid-point rent increased from $1,449.01 to $1,483.28 over the same period for a net quarterly change of $34.27.
“The first quarter is historically the quarter where we tend to see the start of rent increases for the year, resultant of move outs associated with home buying and location changes,” said Ron Throupe, associate professor of real estate at the University of Denver’s Daniels College of Business, in comments accompanying his report.
The 2.2% increase in average rents in the first quarter matches the 10-year average gain seen in metro Denver, said Mark Williams, executive vice president for the Apartment Association of Metro Denver, in a separate release.
The minuscule annual gain in rents stands in sharp contrast to the inflation seen in home prices, which are up 15%, he said. Throupe adds that rent inflation has been falling since 2016 and is running below overall inflation. If wage gains can continue to outpaced rent increases, that will provide tenants more breathing room in their household budgets.
“In an environment where finding the right housing can be challenging, stability in apartment rents is good news for renters,” Williams said. “Apartments are still the most affordable, the most convenient, the most environmentally green way to live.”
Apartment List, which provides a monthly apartment report, estimates rents in Denver rose 1.8% between March and April, the 44th fastest rate of increase among the nation’s 100 largest cities. Measured year-over-year in April, apartment rents are still down 2.1%, the 17th largest rate of decline.
Metro Denver has more than 371,000 apartments with nearly 27,000 more on the way, according to Apartment Insights. More than 140 apartment communities are under construction, with most expected to finish within the next two years.
“Metro Denver’s multifamily market has left behind the effects of the pandemic and re-established its course of sustained growth, with vacancy at pre-COVID levels,” said Terrance Hunt, vice chairman of Newmark in the AAMD release. “We believe that the second and third quarters will experience continued strong rent growth, as the spring and summer months generally outperform winter months in Denver’s seasonal rental market.”