DENVER – A record number of new apartments in Denver helped fuel a dip in rental costs at the end of 2016.
That’s according to the latest Denver Metro Area Apartment Vacancy and Rent Survey from the University of Denver’s Daniels College of Business.
Developers built 9,962 new units in Denver last year. Harvard University instructor Teo Nicolais, who specializes in real estate, says that’s the most in one year in the city’s history and a huge increase over 2010, when the city added just 498 new apartments.
As a result, the average cost of a rental dipped slightly in what could be the beginning of a downward trend going into the new year.
In the last quarter of 2016, the average rent dropped to $1,347 from $1,371 the quarter before, the survey found. The Apartment Association of Metro Denver, which publishes the survey, said it was the second consecutive quarter of rent decreases.
While the average rent has gone down, the median rent held steady at $1,329.
The survey also shows an increase in vacancy rates around the metro area. In the last quarter of 2016, 6.2 percent of units in the area were available, compared to 5.1 percent the quarter before.
Vacancy rates tend to be higher in the fourth quarter, but AAMD said 2016’s average vacancy rate is the highest since 2010.
Like other cities experiencing rapid population growth, Denver has struggled to keep housing affordable. AAMD said 2016’s construction boom provides some much-needed relief.
“Housing becomes more affordable when there is more of it and with each passing week Denver’s apartment industry is adding to our housing stock,” said Nancy Burke, AAMD’s vice president of government affairs.
Other reports have found Denver’s rental market to be loosening up some, though home prices are still generally on the rise.
The median price of a single-family home in Denver increased by 8.5 percent over the past 12 months to $337,450, according to the Denver Metro Association of Realtors, while condos increased by 14.4 percent to a median price of $257,500.