2021 Fourth-Quarter Denver Apartment Vacancy and Rent Report
Researchers at the University of Denver’s Daniels College of Business released the fourth quarter Denver Apartment Vacancy and Rent report showing a historical record on net absorption of apartment units for 2021. The overall net absorption of units for the year 2021 was 19,353 units. Total net absorption for 2021 surpassed the boom year of 2018 which saw 13,708 units absorbed. Historically speaking, this net absorption is the highest on record since this report started monitoring absorption as of 1988.
The fourth quarter result also showed a negative rent change as expected when compared to the third quarter, with a decrease of ($17.69) from $1,726.36 last quarter.
“This is a typical seasonal negative rent change effect of late fall with fewer renters looking, and communities are more likely to negotiate leases to enhance occupancy before the slow winter months,” says Ron Throupe, associate professor of real estate and the author of the report. “This change is relatively less than prior years and shows the resilience of the Denver rental market. It is also partially explained by units that do turn over being repriced, rent increases incorporated from this past year, and then dampened by the seasonal lull.”
Ron Throupe
The average rent change year over year for 2021 came in at $198.41 ($1,708.67 versus $1,510.26). This yearly rent change is just over a 13% increase for the year as of Dec. 10, 2021.
The Metro Denver apartment market showed an overall quarterly vacancy increase from a near-record low of 3.8% to the current 4.3%, with a year-over-year decrease of 1.5% from 5.8%. The current vacancy rate remains low by historical numbers. Unit turnover came in at 2.9%, which is a significant decrease from the 4.4% last quarter, and less than the year-over-year measurement of 3.3%.
“These results continue to show a decline in unit turnover, suggesting movement to other housing choices is still sluggish in comparison to past years,” Throupe says. “In ‘catch up’ from a slow 2020, the Denver Metro apartment market added a strong 6,282 new units to inventory this quarter and 12,036 for all of 2021, outpacing absorption for the quarter which logged a seasonally impressive 4,987 net units resulting in the uptick in vacancy from 3.8% to 4.3%. The high percentage of unit delivery for the year occurring in the fourth quarter, resulting in a vacancy increase, masks the very strong year of net absorption.”
The report is conducted by the University of Denver’s Daniels College of Business and Colorado Economic and Management Associates and is sponsored by the Colorado Department of Housing.
For interviews with Ron Throupe, please contact Kristal Griffith at kristal.griffith@du.edu. To obtain a copy of the Denver Metro Area Apartment Vacancy and Rent Survey report, please contact Christopher Dean, vice president of communications for the Apartment Association of Metro Denver, at 303.329.3300, or visit www.aamdhq.org.