The Denver Metro Apartment Vacancy and Rent report for 3rd quarter 2017 shows a slight pullback as the average rent is down approximately $8 and the vacancy rate is up 0.4 percent to 5.4 percent.
“A similar result also occurred in this quarter last year, where we saw a slight pullback in rent as management decided to be more aggressive in getting tenants leased prior to the winter season and thus avoiding the lease-up and new builds that were expected for this prior spring,” says Ron Throupe, associate professor of real estate and construction management at the Daniels College of Business and author of the report. “While we have heard private comments sensing a slowing in the market for rents and demand, let’s not rush to conclusions on how much this quarter’s results say about the future.”
Denver County has the highest vacancy rate of 6.8 percent as this county has the urban core where new apartments continue to gain certificates of occupancy and others break ground. This scenario is expected to continue going forward in comparison to other metro Denver counties. What is interesting is that Denver County may have increased the overall metro vacancy number, but it did not drag down metro Denver rent totals.
The average rent for Denver County actually went up more than $18 for the quarter, which illustrates that new unit rents are higher than the averages and continue to put pressure on renters. What is also interesting is that the economic vacancy for Denver County also went down, but it was the only county with negative absorption.
Whereas the counties of Jefferson, Arapahoe and Boulder show vacancy rates at least 1 percent below the metro average, and are considered tight markets for renters. These results also follow from the lack of new units in comparison to other counties. The exception to this being Arapahoe County, which had a significant amount of new units (1638), and absorbed most (1438), resulting in a slight vacancy increase. These Arapahoe County results may be an indication of renter’s willingness to locate outside the urban core, and deserves to be monitored.
The Denver Metro Area Apartment Vacancy and Rent Survey is conducted by the University of Denver’s Daniels College of Business and Colorado Economic and Management Associates, published by the Apartment Association of Metro Denver and sponsored by The Colorado Dept. of Housing.
This survey is conducted via mail and online submissions. It includes only those units with a certificate of occupancy. The third quarter 2017 Survey includes information on 120,950 apartment units.
For interviews with Ron Throupe, please contact Kristal Griffith at Kristal.firstname.lastname@example.org. To obtain a copy of the Denver Metro Area Apartment Vacancy and Rent Survey report, please contact Christopher Dean, vice president of Communications for the Apartment Association of Metro Denver at 303-329-3300 or visit www.aamdhq.org.