For some, it’s a word that means strict budgets, and maybe a few sleepless nights at the end of each month. For others, it means passive income—as in “earning money while lounging on a beach.”
In case you’ve been living under a rock for several consecutive years, rent in Denver has been steadily increasing, and this quarter proved no different. The average rent across the Denver metro area has increased to $1,371—an all-time high—during the second quarter of 2016. That’s a $55 increase per unit since our last all-time high of $1,315 in the first quarter of 2016 (all of this according to the latest apartment market survey conducted by Associate Professor Ron Throupe of the University of Denver’s Daniels College of Business, and by Colorado Economic and Management Associates.)
Such rent increases have provoked seething discontent across a wide variety of population segments in Denver. At least we all seem to agree on something:
There are some indications that rising rents may be caused by some very good news however: “The upward cycle in rent growth resulting from the demand for units continues to impress as Denver becomes a destination for business and a top-rated place to live,” said Throupe.
Demand is simply very high right now, with reports that Denver seems set to remain a red hot destination for millennial transplants. So despite a sizable 4,000 unit increase in the supply of available apartments during the second quarter of 2016, the rate of vacancy dropped from 6.1 percent to 5.4 percent.
In other cities around the United States, the issue of rising rents has taken on a degree of absurdity. For example, earlier this year the housing situation in San Francisco gave rise to the attention grabbing headline “Meet the Guy Paying $400 to Live in a Literal Wooden Box Inside Someone Else’s Apartment.” According to that story, the average price of a one-bedroom apartment in San Francisco is currently $3,670.
So is the situation in Denver a case of the glass half full or half empty? Rents are definitely rising but according to Apartment List, the national average one-month rent for a two-bedroom apartment in the U.S. is $1,300, and Denver is currently ranked 16th in the country for cities with the highest rent.