As the leader in property management in Denver, Real Property Management Colorado tracks the Denver market very closely. Our most recent quarterly report created in partnership with RentRange shows that while single-family home rents in the Denver metro area did increase for the third quarter of 2018, the increases were small. For a three-bedroom home in Denver, rents rose only slightly from $2106 to $2124. The year-over-year increase is also down compared to other quarters. For the second quarter, rents rose 2.5% annually compared to the 0.85% increase for Q3. Quarter one saw a 2.15% increase, while the fourth quarter of 2017 saw a 4.11% increase and 3.2% for quarter three of 2017.
The Statewide and National Story
Compared to its capital market, statewide rents decreased from $1814 to $1775. A decline in average rents for the year was also seen nation-wide, dropping from $1521 to $1483.
There are a few reasons for the slow increase in the Denver metro area. The number of new apartments available is one cause for the declines. Many areas in Denver saw declines in rents where new apartment units came online. Tenants who may have rented single-family homes may lean more towards the newer apartment builds instead. This can cause many landlords to lower their rents in order to fill vacancies.
The buy-sell market also plays a role. Homeowners who didn’t sell during the summer throw up the “For Rent” sign to keep their homes form sitting vacant until the market ramps up again. This only increases the inventory, driving up supply while lowering demand.
The good news is that the Denver rental market is still going strong. Vacancy rates are still low, only 2.87%. This is only up slightly from last year’s 2.72%. Statewide, the vacancy rate came in at 3.1%, while the national number is around 5.3%.
The number of homes that are rentals vs owner-occupied is smaller in Denver compared to state and national numbers. About 20.3% of Denver homes are rentals. Statewide, that number is 28.4%, and nationally 24.8% of homes are rented.
Bedroom-wise, average rents in the third quarter of 2018 came in at $2,884 for a 6-bedroom; $2,461 for a 5-bedroom; $2,170 for a 4-bedroom; $1,820 for a 3-bedroom; $1439 for a 2-bedroom; and $1,097 for a 1-bedroom.