DENVER – Denver will add thousands of new apartments this year, but will the new additions be enough to slow the rate of rising rents across the city?
Across the metro area, developers are expected to build 12,341 new apartment units in 2018, according to real estate software and analytics firm RealPage. In 2017, the metro area added 10,602 new units.
Residential construction in Denver has had a hard time keeping up with demand, as evidenced by rising home and rental costs. According to ApartmentList, rents in Denver were up 1.6 percent year-over-year at the end of 2017.
As of December, the median rent for a two-bedroom rental was just over $1,300. A one-bedroom apartment goes for $1,030.
There are some early signs that things may be slowing down a bit: Denver’s rate of increase was lower than the national average of 2.7 percent and the last four months of the year all saw slight declines in rent prices.
Nationally, rents have been on the rise for eight consecutive years and RealPage Chief Economist Greg Willett expects 2018 to look a lot like 2017.
“Minimal shifts in momentum are expected over the coming year,” Willett said. “Apartment demand should stay very solid, but new supply will continue to be delivered at a pace that will keep leasing conditions competitive in the top-tier product niche. In turn, rent growth should remain moderate.”
Unfortunately for people who have already been priced out of the market, most of the new apartments to be completed in 2018 will be on the higher end of the price range, Willett said.
“The country’s apartment market remains tight, with product availability generally limited to recently-completed properties moving through initial leasing,” Willett said. “Unless a renter can afford that expensive new stock, finding a ready-to-lease unit takes some real work in most locations.”