Apartment vacancies rose across the Denver metro area from October to December, according to a new report from the Apartment Association of Metro Denver.
A 5.6% increase in vacancy coincided with a $32 drop in rent. That occurred in every metro area county. In Denver, vacancies jumped even higher, by 6%.
The data used in the report came from Apartment Insights.
The $32 drop in rent is significant, said Mark Williams, executive vice president of the Apartment Association of Metro Denver.
"Single-quarter rents have dropped over $20, which has only happened 3 times since 1981," he said in a statement.
Still, rent is high for many who have lived here for more than a year or two.
Median rent last quarter was $1,791. That's a big jump from the same quarter in 2020, when it was $1,425.
The metro area had nearly 11,000 new apartments built over the past year and 3,215 in the last quarter alone.
Currently, 40,000 new units are under construction, according to the Apartment Association, and between 20% and 30% of those will come on the market in 2023.
"The report shows 10,992 new apartments were added into the rental housing market in 2022, while only 6,933 additional apartments were occupied (absorbed) during 2022," explained the report's author, Cary Bruteig of Apartment Insights. "This helped drive the increase in vacancy.
"More new units help drive the vacancy rate up which helps take pressure off rental rates," Bruteig added. "If vacancy rates continue to increase, and given the large construction pipeline they probably will, then rents are likely to either remain flat or continue to decrease."
While that's offering some hope for renters, the metro area is still tens of thousands of units behind what is needed to keep prices where they are or drive them lower.
"This quarter's data shouldn't take away from efforts to increase housing supply," said Drew Hamrick, senior vice president for government affairs and general counsel for the Apartment Association of Metro Denver, in a statement. "The solution here is to continue to push for more housing. Rising vacancy has taken the pressure off rent growth, which slowed to only 6.5% over the past 12 months."
The message that the metro area needs more housing has been echoed by Gov. Jared Polis.
At his State of the State address, Polis committed to making it easier to build housing statewide over his next four years in office.
"Housing policy is economic policy," he said. "Housing policy is transportation policy. Housing policy is water policy. Housing policy is public health and equity policy."
