Denver, CO

Denver apartment rents drop in fourth quarter

Margaret Jackson

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By Margaret Jackson / NewsBreak Denver

(Denver Colo.) Rental rates dropped during the fourth quarter, an indication that metro Denver’s apartment market is returning to pre-pandemic stability.

Rents in the metro Denver apartment market dropped 2.86%, reaching an average rent price of $1,708.67, according to a report from the Apartment Association of Metro Denver. This represents a decrease of nearly $18 from the average rent of $1,726.36 in the third quarter.

Average rent per square foot in the fourth quarter fell 0.99% from $2.03 to $2.01. Rental discounts and concessions averaged 8.8%, compared to 13.4% during the previous quarter.

“For months, housing providers were prohibited from increasing rent on leased apartments,” said Drew Hamrick, senior vice president of government affairs for the Colorado Apartment Association. “Rental units’ value was artificially deflated, and over the last several months, rent rates have accelerated back to meet market demand. As government interference in our industry wanes, the market corrects and rent rates stabilize, as we observed during Q4.”

Vacancies on the rise

The apartment vacancy rate increased from 3.8% to 4.3%, with 22 of 23 metro Denver neighborhoods experiencing an increase in vacancy. Despite the increase, vacancy rates in metro Denver remain historically low, down 25.86% year-over-year.

Metro Denver’s continued low vacancy rates should inspire confidence in the city’s rental housing market, indicating strong demand, a steady cash flow for rental housing providers and strong rental housing security for Denver residents.

“Continued low vacancy rates in metro Denver indicate the city’s ongoing need for new apartment units,” said Mark Williams, executive vice president of the Apartment Association of Metro Denver. “Demand remains historically high, and unless we increase the pace of new construction, we’ll see high costs and low supply in 2022.”

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I'm a Denver-based business writer with expertise in commercial and residential real estate as well as general business news.

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