Metro Denver’s apartment market held steady in the third quarter with both rents and the vacancy rate essentially flat, according to a quarterly update from the Apartment Association of Metro Denver.
The region’s apartment vacancy rate dropped 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 a month, up $18 or 1% from where it was a year earlier. The median rent was $1,810, up $19 a month from the third quarter of 2022.
“The market has been stable through Q3, with steady rates for both vacancy and rental rates,” said Mark Williams, executive vice president for the AAMD in comments accompanying the report. “As the vast majority of costs are increasing all around us, to have rental rates so flat is good news for renters.”
Smaller rent increases should eventually help bring down the overall consumer inflation rate, which was running at a 5.4% annual rate in September in metro Denver, according to the U.S. Bureau of Labor Statistics.
Average rents were $1,725 a month in Adams County; $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 apartment units on the drawing board. Roughly 48,000 of those units are under construction, 24,000 have a set construction start date but aren’t underway and 48,000 are in earlier planning stages, according to Apartment Insights, which put the report together.
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“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 decrease,” predicted Cary Bruteig with Apartment Insights.
Although rents have been stable over the past year, tenants in metro Denver are still dealing with a 19% gain in rents since 2019, according to Apartment List, which cites numbers from the U.S. Census Bureau. Incomes over that same period are up 16%.
About 219,000 renter households or 52% of the total renting are “cost-burdened” meaning they spend more than 30% of their income on housing. That is up from 49% share of cost-burdened renter households in 2019, according to Apartment List.
About one out of four renter households in the region are “severely” cost-burdened meaning they spend half or more of household income on rent, leaving them little money for other expenses.
