Gov. John Hickenlooper on Wednesday urged apartment developers, building owners, brokers and multifamily support businesses to “seize the day” when it comes to capitalizing on metro Denver’s apartment building boom.
Hickenlooper told a room full of business leaders, at the Apartment Association of Metro Denver’s 2013 Summer Economic Forecast event at the Marriott Denver Tech Center, that the area is leading the apartment development wave for the nation because of the influx of Gen Yers, its diverse industry base and its quality-of-life amenities.
“I remember in the ’80s seeing bumper stickers that said ,‘Oh God Give Us One More Boom and We Won’t Piss it Away,’” Hickenlooper said. “Well, seize the day and don’t piss this one away. It’s never going to get any better. This is about as good as it gets for multifamily development.”
Speaker Terrance Hunt, principal with ARA Colorado and one of the top multifamily brokers in the city, said, “I’ve never had more clients say Denver is the top-performing multifamily market in the nation. Equity Residential told me in May, Denver surpassed San Francisco at the top.”
The Association released its second quarter vacancy and rent report for the metro Denver market Wednesday, which showed a 13-year-low vacancy rate of 4.2 percent and average rents at $1,022 — the first time metro Denver’s average rent has climbed above $1,000.
Hunt, and Ron Throupe, professor of real estate at the Burns School of Real Estate & Construction Management at the University of Denver, and report author, said several factors are fueling the hot apartment market:
• The Denver area’s population has been growing by about 20,000 people per year and is pushing 3 million.
• Home ownership rates here are at 61 percent, below the national average of 63.9 percent. A 1 percent drop in homeownership equates to 11,000 homeowners.
• The area has experienced a record-low level of available single-family homes and condos for sale (9,187 in July, according to Metrolist Inc.).
• The annual mortgage cost for homes grew, on average, $137 (including the most recent interest-rate hikes), whereas rents grew an average of $43, also from Q2 2012 to Q2 2013.
• Annually, 33,622 high school graduates reach rental age in metro Denver.
• Denver added 52,200 jobs in the last year.