Construction starts show no signs of slowing in Denver
Are apartment developers hitting the accelerator as a cliff of demand approaches or are they simply trying to keep up in a housing market that continues to defy expectations?
Metro Denver should see another 12,000 apartments come on the market in 2018, continuing a long and unprecedented streak of multi-family construction, said Greg Willett, chief economist with RealPage, a real estate technology and analytics firm.
Builders delivered 10,854 new apartments in metro Denver last year, and tenants soaked up 10,201 of them, keeping the occupancy rate stable at 94.3 percent, according to RealPage.
RealPage estimates apartment rents in metro Denver rose 3.2 percent in 2017, the 15th-fastest gain in the country and ahead of the U.S. gain of 2.5 percent. The company puts the typical monthly rent at $1,404 in metro Denver.
The new supply should keep landlords and managers busy attracting tenants and also dampen any rent spikes.
“It could be tough for property owners and operators to push rents much in the neighborhoods that will get the most new product, including the urban core,” Willett said.
Overall, U.S. apartment rents climbed a modest 2.5 percent in 2017 to $1,330, according to RealPage. As is usually the case in the fourth quarter, landlords boosted discounts to attract tenants.
“While the apartment rent growth pace has slowed from the performance seen a couple years ago, it’s the longevity of the current cycle that’s so impressive,” Willett said.
Abodo, an apartment-finding service, estimates the median one-bedroom apartment rent statewide topped $1,000 last year. Abodo puts the median rent for a one-bedroom Denver apartment listed on its site in January at $1,476, and $1,843 for a two-bedroom unit.
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