Denver Metro is one of many cities that can boast a strong real estate recovery and one of the strongest market performers is the multi-family housing market. In a recent interview with leaders at a meeting of the Apartment Association of Denver Metro, Gov. John Hickenlooper encouraged developers to “seize the day” as demand for rentals is robust. It is also rising and rents are going up with demand. It was a strong call-to-action for all developers considering new projects.
Denver Metro Real Estate
Many areas of the real estate market have seen a strong recovery. However, an investor-driven market during early and late spring with downward spiraling housing inventory has contributed to a shortage of rentals in many areas. Along with rental rates that, in many cases, are surpassing the income requirements necessary to afford the rentals. At this time, Denver is considered to be the top-performing multi-family market in the nation. Gov. Hickenlooper suggested that this trend will continue for many years. As the Denver area invites “Gen Yers”, has a very diverse industry base and offers premium quality of life amenities.
This May, Denver surpassed even the strong rental growth of San Francisco. Suggesting that this is just one more area where Denver, CO is leading the nation in the real estate recovery trends. Denver Metro is also by far, the hottest market with many premium apartments. Including condo developments seeing lengthy wait-lists of new prospective tenants. Single-family homes are also at a premium and seeing 10-25% increases over last year, in some areas.
The biggest rental shortage, or the type of unit most in-demand, not surprisingly, are efficiency units. Renters are looking for the most affordable units they can locate. But they are quickly finding that demand for these units, in particular, has driven up their rental rates significantly in some areas. Overall the Denver vacancy rate plummeted to 4.2%, a 13-year low, with rising rental rates climbing to $1,022 – a first for Denver Metro rents.
The forecast for apartment developers is rosy. It will likely remain that way for some time as Denver’s population growth is on the rise.