Metro Denver average rents fall to levels last seen two years ago

Recent data from the Apartment Association of Metro Denver shows that the area is experiencing a surplus of new apartments, leading to a 16-year high in vacancy rates and a decrease in average rent prices. The average rent in metro Denver dropped to $1,819 in the first quarter, down from $1,842 in the previous quarter and $1,846 in the same quarter of the previous year. If rents had kept up with inflation, they would be closer to $1,951 per month.

This oversupply is attributed to the significant number of new apartments being constructed in the area. In the past year, developers have added 20,822 new units, while only 14,504 have been leased. This imbalance has resulted in a vacancy rate of 7%, the highest level since the Great Recession.

Different submarkets within the metro area are experiencing varying vacancy rates, with Douglas County having the lowest at 5.8% and Denver the highest at 7.7%. Some distressed areas, like southeast Denver and western Aurora, have vacancy rates exceeding 9%, with older buildings facing up to 20% vacancy rates.

Despite the overall decrease in rent prices, newer apartments in central Denver offer good value for renters. The average rent for apartments built in the 1970s is $1,497, while newer units in central Denver provide affordable options below $1,000 per month.

Landlords typically begin to take action when vacancy rates exceed 7% by reducing rents and offering concessions to attract tenants. While the market has historically absorbed around 5,000 to 6,000 new apartments per year, the recent surge in construction has led to an unprecedented average of 15,000 new units being added annually.

Looking ahead, renters may continue to benefit from favorable conditions for another year or two until supply and demand reach equilibrium. However, concerns arise if the high vacancy rates and rent decreases signal the start of a recession. Job losses could further impact absorption rates, prolonging the time needed to fill the 30,000 apartments currently under construction in metro Denver.

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Originally Published: April 25, 2025 at 9:54 AM MDT