With rents declining slightly, new apartments still being built and coming online and evictions at normal levels, metro Denver’s apartment market remains strong.
That’s according to the Apartment Association of Metro Denver, which released Q4 numbers Wednesday.
“2020 gave us the lowest annual rent growth in 12 years,” said Mark Williams, the association’s executive vice president. “The last time that happened was 2008-09, during the recession, when rents actually decreased.”
Average rents were $1,510/month in the fourth quarter – down from the Q3 level of $1,521, but up slightly from the $1,503 level set in the same quarter in 2019. Median rents were also down quarter-to-quarter, from $1,463 to $1,449 per month. That’s a $7 decline from the $1,456 median rent in Q4 2019.
The metro Denver vacancy rate jumped a half a percent in a year to 5.3% - which represents about 21,000 empty apartments. The hardest hit areas for higher vacancies and declining rents were urban areas: downtown Denver and Boulder. There average rents dropped $25/month and $34/month respectively. Vacancy rates, meanwhile, were on the rise – especially downtown, which saw the highest climb in Q4.
“When you rent an apartment downtown, you want all those amenities like luxury opportunities, events, dining and activities. When those things are not present, interest wanes,” said Williams.
New product kept hitting the market in 2020, just like the previous seven-plus years, with 11,000 units coming online. It marked the seventh year in a row developers built at least 7,500 apartments in a year.
Of those new apartments, renters snatched 8,185 in 2020 – a lower level than the 10,829 new apartments rented in 2019 and the 13,708 absorbed by renters in 2018. And there’s more on the way. Williams said 22,307 new apartments are in the pipeline for the next two years – about 100 new apartment communities.
Surprisingly, landlords collected rent from the vast majority of their renters – 93.1% of them in January 2021, and 93.5% statewide. Denver’s market usually hovers near the top 10 nationwide in rent collection, Williams said.
“There was not some catastrophic change in rent payments from pre-to-post COVID,” said Drew Hamrick, general council and senior vice president of government affairs. “There was not much change at all – just within a percentage point.”
Similarly, the number of evictions remained close to normal last year. Through Jan. 24, the entire state had 386 eviction actions filed. Compared to 3,655 filed at the same time in 2020.
“Remember that Colorado’s eviction moratorium expired at the end of December,” Hamrick said. “Again, there was no tsunami of evictions.”
The men said all the rental assistance from the State of Colorado and the U.S. Government – more than $437 million combined – means “there’s no worry about these programs running out of funds.”
The Associations’ Vacancy and Rent survey is conducted by the University of Denver’s Daniels College of Business and the Colorado Economic Management Associations. It covers about 361,000 apartment homes in metro Denver, out of about 750,000.