Apartment rents rose 1% in metro Denver last year, and the vacancy rate remains steady. However, at 48 thousand housing under construction balance may not last long. (Matthew Jonas/photographer)
The Metro Denvers apartment market remained stable in the third quarter, with both rents and vacancy rates remaining essentially unchanged, according to the Apartment Association of Metro Denver’s quarterly update.
The region’s apartment vacancy rate fell to 5.4% in the third quarter from 5.5% in the second quarter, despite the addition of 2,812 new apartments.
The average rent was $1,888 per month, an increase of $18, or 1%, from the previous year. Median rent was $1,810, an increase of $19 per month from the third quarter of 2022.
The market was stable throughout the third quarter, with steady vacancy and rent rates, said Mark Williams, executive vice president of AAMD, in a commentary accompanying the report. With the vast majority of costs rising all around us, keeping rental rates steady is good news for tenants.
Smaller rent increases should ultimately help lower the overall consumer inflation rate, which was 5.4% annually in metro Denver in September, according to the U.S. Bureau of Labor Statistics.
The average rent in Adams County was $1,725 per month; $1,795 in Arapahoe County; $2,009 in Boulder and Broomfield counties; $1,924 in Denver; $2,044 in Douglas County; and $1,910 in Jefferson County.
Metro Denver has about 120,000 new apartments on the drawing board. According to Apartment Insights, which prepared the report, about 48,000 of these apartments are under construction, 24,000 have a set start date for construction but have not yet started, and 48,000 are in earlier stages of planning.
More new units help increase the vacancy rate, which helps reduce pressure on rental rates. If the vacancy rate continues to rise, and given the construction schedule, it likely will, rents will likely remain flat or decline, predicts Cary Bruteig of Apartment Insights.
Although rents have remained stable over the past year, Denver metro tenants continue to see rents increase by 19% since 2019, according to Apartment List, which cites data from the U.S. Census Bureau. Revenues increased by 16% over the same period.
About 219,000 renter households, or 52% of total rent, are cost-burdened, meaning they spend more than 30% of their income on housing. This represents an increase from the 49% share of cost-burdened renter households in 2019, according to Apartment List.
About one in four renter households in the region are severely cost-burdened, meaning they spend half or more of their household income on rent, leaving them with little money for other expenses.
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Image Source : www.denverpost.com