Metro Denver apartment rents are nearly unchanged from last year, but the supply of vacant units has fallen back below pre-pandemic levels, according to Metro Metro Denver’s latest report on vacant and rental apartments.
Year-over-year rents are essentially unchanged, with a gain of $ 7.89 on the median rent and $ 7.85 on the median rent. The vacancy rate in the region fell from 5.8% in the fourth quarter to 5.5% in the first quarter, and fell from 5.9% at the beginning of last year.
The average home rental for the entire metropolitan area was $ 1,543.59 for the first quarter, an increase of $ 33.33 from the average rental for the fourth quarter of $ 1,510.26. Median or median rent increased from $ 1,449.01 to $ 1,483.28 over the same period, a quarterly net change of $ 34.27.
“The first quarter, historically, is the quarter when rent increases tend to start for the year, driven by home purchases and relocation-related moves,” said Ron Throupe, associate professor of real estate at the university’s Daniels University from Denver College of Business, in comments on his report.
The 2.2% increase in average rents in the first quarter is equivalent to Metro Denver’s 10-year average profit, Mark Williams, executive vice president of Metro Denver’s Apartment Association, said in a separate press release.
The tiny annual increase in rents is in stark contrast to inflation in house prices, which has increased by 15%, he said. Throupe adds that rental inflation has been falling since 2016 and is below headline inflation. If wage increases can continue to outperform rent increases, tenants have more leeway in their household budgets.
“In an environment where finding the right apartment can be difficult, rental stability is good news for tenants,” said Williams. “Apartments are still the cheapest, most comfortable and most environmentally friendly way of living.”
The Apartment List, which includes a monthly apartment report, estimates that rents in Denver rose 1.8% between March and April. This is the 44th fastest rate of increase among the 100 largest cities in the country. Measured in April year-on-year, apartment rents are still 2.1% lower, the 17th highest rate of decline.
Metro Denver has more than 371,000 apartments, nearly 27,000 of which are on the go, according to Apartment Insights. More than 140 shared apartments are under construction, most of which are expected to be completed within the next two years.
“Metro Denver’s multi-family market has left the effects of the pandemic behind and is back on track of sustained growth with vacancies at pre-COVID levels,” Terrance Hunt, Newmark vice chairman, said in the AAMD press release. “We believe the second and third quarters will see continued strong rental growth as the spring and summer months outperform the winter months in the Denver seasonal rental market generally.”