A new report says the average Denver rent shot up by about $64 between March and June of this year. The Apartment Association of Metro Denver says that June 2018’s average rent was just over $1,484.
However, even with that price hike, the Apartment Association says there are signs that Denver’s rental market may cool off a little bit, looking at the city’s steadily increasing vacancy percentage. The vacancy rate is currently at 6 percent and has been hovering around that mark for over a year now.
When vacancy rates are lower, landlords can charge more for rent. For example, during the second quarter of 2015, the vacancy rate was 4.5 percent, and the average price went up accordingly.
The demand for units is still outpacing Denver’s record levels of construction. In the last three months, Denver has seen 3,435 apartments built. In the same three-month stretch last year, 2,152 units were constructed. But during that time, the number of occupied units increased by 3,875.
“Denver’s rental market reflects the ongoing race between new construction and new residents moving to the city,” real estate investment educator Teo Nicolais said in a press release. “Given the unprecedented level of construction, things will eventually tip the other way: the number of new apartments will exceed the new demand and we’ll see downward pressure on rents.”
Areas outside of central Denver haven’t been impacted quite as much. Wheat Ridge, for example, has an average rent price of $1,071 and saw a mere $8 increase in their average rent price over the second quarter, remaining the most affordable submarket in the Denver metro region.
Coming in as the second most affordable submarket in the area is the Aurora central northwest market. That area refers to the units along I-225 between Colfax and Alameda, and they are currently looking at an average rent price of $1,236.
Unsurprisingly, the highest rate in the area remains in downtown Denver, where the average rent prices sit at $2,011.