April Housing Market Map
Apartments contributed $10.4 billion to the metro Denver economy and supported 97,400 jobs in 2013, according to a study released Tuesday by the National Multifamily Housing Council and the National Apartment Association. Statewide, apartments contributed $15.6 billion in economic benefits in Colorado in 2013 and supported 154,300 jobs. Nationally, the industry is credited with contributing $1.3 trillion to the U.S. economy and supporting 12.3 million jobs, according to the study, which was overseen by economist Stephen Fuller at George Mason University’s Center for Regional Analysis.
“Denver is a national leader for job creation, which is creating tremendous apartment demand,” said Nancy Burke, Vice President of Government Affairs at the Apartment Association of Metro Denver. “Apartment supply levels are approaching a 20-year high in Denver.”
Of the metro Denver total, apartment construction contributed $1.6 billion in economic activity, with another $1.6 billion added from apartment operations. Renters in metro Denver, who numbered just shy of 440,000, paid an additional $7.1 billion in rents in 2013. Metro Denver added about 9,000 new apartments last year, up significantly from the 1,300 units built in 2011 and the 4,200 built in 2013, according to Cary Bruteig, a principal with Apartment Appraisers & Consultants in Denver. “Rent-increase numbers are fueling the fire,” he said. Homeownership rates locally and nationally have fallen since the housing downturn, limiting new home construction. Multifamily rental construction, however, is a much different story.
The Future of the Market
Bruteig is forecasting that metro Denver could reach 11,000 new apartments this year, breaking a 1973 record, and continue to add 10,000 annually over the next few years. The old record would have fallen last year, but construction labor shortages delayed about 1,000 units, pushing their completion into 2015. “The new supply should be large enough to lift vacancy rates and put a cap on rent increases,” Bruteig predicts. “It also should result in George Mason University reporting a much bigger economic-impact number next year and going forward.”