As more and more new apartments become available for rent, the Denver metro area is beginning to feel the increase in supply. Rents have begun to decline according to an article from The Denver Channel.
Rents Decline As Supply Goes Up
According to the article, more than 25,000 apartments are being added to the Denver Metro market and are currently under construction. Add to that the additional 25,000 that are currently in the planning stages. With so many units coming available, greatly upping the supply, it’s not hard to see why rents have begun to dip.
Average rent in the Denver Metro area reduced to $1456 with vacancy rates inching up to 5.8%. City Park is Denver’s most expensive submarket with an average rent of about $1900. The Highlands, an area in northwest Denver that has also seen an increase in the number of new apartments, averaged only slightly lower at a little over $1700 per month. Wheat Ridge came in as Denver’s cheapest suburb with an average rent of $1133. Part of this comes down to the types of units available in each area. City Park has newer inventory, many of which offer upscale amenities which people will pay higher rates for. Wheat Ridge, on the other hand, hasn’t seen as much development, and offers older units that lack the same amenities.
What Does This Mean for Denver?
Denver is still popular, attracting many new residents to the area. So long as demand remains strong, developers will continue to set their eyes on Denver and new apartment buildings will continue to go up. With the steady supply of new construction projected to continue, the pressure on rental rates will likely go down. This means that landlords may not see the same increases they have over the last few years.