Rental Market in Colorado
The rental market in Colorado has finally slowed down. Metro Denver apartment rents leveled off and vacancies rose sharply between the third and fourth quarters after a surge in new supply left more landlords scrambling to fill their units, according to a quarterly update from the Apartment Association of Metro Denver. The drop in median rents wasn’t huge — a $7 decline from $1,252 a month in the third quarter to $1,245 in the fourth. The average rent held steady at $1,292 a month. But in a sign more downward pressure on rents could be coming in the months ahead, the area’s apartment vacancy rate surged to 6.8 percent from 5 percent in the third quarter. The fourth quarter is typically a weaker period for apartment rentals, but the jump went far beyond any seasonal adjustment. It was the biggest quarterly surge in vacancies since heavy job losses caused people to move out of their apartments in 2008 and 2009.
Vacancy rates were highest in northwest Denver, at 17.4 percent; Boulder County, excluding Longmont and the city of Boulder, 14 percent; downtown Denver, 11.2 percent; and north Douglas County, 9.6 percent.
Developers have focused on those areas for higher-rent apartments. Given that owners of new apartment buildings may not be familiar with the survey or may be too busy leasing units to respond, the actual vacancy rate in those areas might be understated. Given strong in-migration, the only thing that would change that would be a lack of job growth. But an employment report recently showed the state added a strong 10,700 jobs in December from November.