The average rent continues to inch down and vacancies to increase in the Denver metro area.
Mark Williams, executive vice president of the Apartment Association of Metro Denver, cited the basics: supply and demand.
“Due to a surplus of available apartments, average rents declined for the second quarter in a row and ended at $1,456 for 2018,” he said in a statement Tuesday.
The average rent was $1,484 in the second quarter of 2018 and $1,465 in the third quarter. The metro area’s vacancy rate increased from 5.5 percent in the third quarter to 5.8 percent in the fourth. The rate translates to some 20,000 vacant apartments at the end of the fourth quarter, according to the Denver Metro Area Apartment Vacancy and Rent survey coordinated and published by Williams’s association, conducted by the University of Denver’s Daniels College of Business and Colorado Economic and Management Associates and sponsored by the Colorado Department of Housing.
According to the survey report, 12,324 apartments were completed in 2018. The report has tracked construction since 1988 and puts the 30-year average at 4,534 new apartments a year.
“Building at three times the long-run average pace significantly increases the likelihood of oversupplying the market,” Teo Nicolais, a real estate specialist at the Harvard Extension School, said in the association’s statement Tuesday.
While the average was $1,456, rents ranged from $1,918 in City Park to $1,133 in Wheat Ridge. Age as well as location played a role. Apartments built since 2010 averaged $1,796, while units dating to the 1970s averaged $1,172.