Apartment rents in metro Denver continued their rapid climb in the third quarter of 2013, with an average monthly rent of $1,048 — an increase of 6.3 percent, or $62, from 2012’s third quarter average of $986.
Ryan McMaken, an economist for the Colorado Division of Housing, says that on an inflation-adjusted basis, the average rent in metro Denver peaked in 2001. The average rent in the third quarter of 2013, adjusted for inflation, is 2.2 percent below that peak, said McMaken.
“Rent levels are hurrying back to their former peak period and are basically back to what they were when they peaked right before the 2002 dot-com bust,” said McMaken.
The rise in rent occurred despite the fact that slightly more apartments were available; the metro vacancy rate rose to 4.4 percent during the third quarter of 2013, up from 2012’s third quarter rate of 4.3 percent. Experts expect a slight moderation in rent growth in the next couple of years as new apartments are completed.
Ron Throupe, co-author of the report and associate professor at the University of Denver’s Daniels College of Business, said a significant number of apartment units will open in 2014 and that may affect vacancy rates slightly. But, he says, the new units are high-end apartments built for young, well-educated, well-paid professionals moving to Denver.
“I expect the rents to be going up still,” says Thorpe.