Metro Denver apartment rents and vacancies flat in first quarter
RklMRSBQSE9UTzogVGhlIDEyMy11bml0IFBvcCBEZW52ZXIgYXBhcnRtZW50IGNvbXBsZXgsIDYyNSBTYW50YSBGZSBEcml2ZSwgRGVudmVyIGlzIGFsbW9zdCByZWFkeSBmb3Igb2NjdXBhbmN5LiBEZXZlbG9wZXIgRmlyc3QgU3RvbmUgRGV2ZWxvcG1lbnQgb3JpZ2luYWxseSBlbnZpc2lvbmVkIGNvbmRvbWluaXVtcyBmb3IgdGhlIHVuaXRzLCBidXQgaW50ZXJlc3QgcmF0ZSBzcGlrZXMgaW4gMjAyMiBjaGFuZ2VkIHBsYW5zLg==
RGVubmlzIEh1c3BlbmkvRGVudmVyIEdhemV0dGU=
One word describes the first quarter “Vacancy & Rent Report” by the Apartment Association of Metro Denver, “flat.”
As in, rents stayed basically flat from the last quarter of 2022 — rising only 0.5 percent to an $1,846 average for all unit types. Vacancies likewise remained flat, staying the exact same 5.6% level from the prior quarter.
The biggest news from the report is the 43,000 units under construction in the seven-county Denver metro area, with an estimated 25% being delivered this year.
Denver, nonprofits and developers strive to increase affordable housing
The report shows 3,571 new apartments were added into the rental housing market in Q1, compared to about 2,700 units per quarter over the past four years, said Cary Bruteig, the report’s researcher with Apartment Insights, in a news release.
“More new units help drive the vacancy rate up which helps take pressure off rental rates. If vacancy rates continue to increase, and given the large construction pipeline, they probably will, then rents are likely to either remain flat or continue to decrease.”
“I’ve never seen anything like that, going all the way back to 1993,” Bruteig said at a news conference Tuesday.
When asked when rents might start heading down, Bruteig said he expects when the vacancy rate climbs above 6% – likely within the next 12 months with all the new construction coming online.
Historic Golden Liquors store adds agave classes, tastings as Destilados de Agave
“My outlook over the next few years is for vacancy to just keep moving higher,” he said. “The rents, at some point, will start moving downward unless we have an incredible rebound in demand.”
Looking over the past 12 months, rent increased an average of 5%. But a huge spike last year in average rents, followed by the deepest drop experts have seen in more than 20 years of $32 in the last quarter of 2022, means for nine months rents were basically flat, Executive Vice President Mark Williams said.
“The market has been very stable over the past nine months, with very flat rental rates and a relatively slow increase in vacancy,” Williams said. “When the vast majority of costs are increasing all around us, to have rental housing be so stable is good news for renters and housing providers.”
Vacancy rates increased in three counties, decreased in one county and remained the same in two counties in the metro area, according to the report.
“Only Denver County decreased in vacancy, going down 50 basis points,” Bruiteg said.
Buildings constructed since 2020 had the highest vacancy at 6.8%. Those constructed prior to 1970 had the lowest vacancy at 4.9%, the report shows.
Association officials cheered the metro Denver market passing the 400,000 units mark for the first time ever.
“That’s kind of a landmark number, and something that we at the association celebrate,” Williams said. “The industry has been growing rapidly for the last few years and to hit 400,000 is a nice benchmark.”
The report surveyed information from 231,995 apartments.
Metro Moves: Wheat Ridge co-working space Symmetry Collective opens Thursday