Denver apartment rents up slightly after dropping at end of year

Small rent increases reappeared in the metro Denver apartment market after an unexpectedly large drop at the end of last year, but the gains are tracking below the pace of overall inflation, according to an update Tuesday from the Apartment Association of Metro Denver.

“The story from our perspective is that things are really stabilizing,” said Mark Williams, executive vice president for the AAMD, during a news call to discuss the numbers. He added that metro Denver, after years of robust construction, now has more than 400,000 apartments in the market.

The region’s vacancy rate, the share of apartments that are available to rent, stayed steady at 5.6% in the first quarter, matching the fourth quarter rate, according to AAMD’s 2023 First Quarter Vacancy & Rent Report for Metro Denver. The vacancy rate is higher in the newest building, and lowest in the 1970s-era buildings, which tend to have lower rents.

Apartment rents averaged $1,846 in the first quarter, an $8 increase from the fourth quarter average and up 5% over the year, which is lower than the 5.7% annual increase in consumer prices measured in the region in March. The gain, which was less than half of a percent, followed a historic $32 quarterly drop in monthly rents in the fourth quarter.

Cary Bruiteg with Apartment Insights, the research firm that put the study together, noted that apartment buildings constructed since 2020 had the highest vacancy at 6.8%, while those constructed before 1970 had an average vacancy rate of 4.9%.

Some landlords are starting to offer more concessions, although nothing like what was available during the early months of the pandemic. More concessions could be on the way this year and next as more supply hits the market. And a lot of supply is set to arrive.

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