Metro Denver had 94% more apartments available for rent in first quarter of this year than at start of 2019
Colorado landlords are having a harder time filling vacant apartments coming out of last year’s downturn than landlords in most other states are, according to a study from QuoteWizard.
In 29 out of 50 states, the supply of available apartments was actually lower in the first quarter of this year than it was in the first quarter of 2019, according to the study, which examined vacancy rates from the U.S. Census Bureau.
The number of apartments available in Colorado increased by 38%, the eighth biggest gain among the 21 states sitting on a higher supply, ranking just behind New York and ahead of Hawaii.
In metro Denver, apartment availability was nearly 94% higher in the first quarter than it was in early 2019. That ranked Denver 8th out of the 75 largest metros for the increase in available units. That extra supply helped keep a lid on rents, which fell 0.2% over the two-year period studied.
One explanation could be that Denver has a higher concentration of older millennials who left their days of renting behind and purchased a home. Or it could be that more households are doubling up, like young adults moving back in with their parents.
Nick VinZant, an analyst with QuoteWizard and author of the report, said it is more likely a case that remote workers left apartments in more populated and expensive cities and took up residence in less populated areas.
“When we looked at the number of available apartments in large metropolitan areas like Denver, we noticed a consistent pattern. The number of available apartments in large cities is rapidly increasing and rapidly decreasing in smaller ones,” he said.
New Haven, Conn.; Boston; Cape Coral, Fla.; Buffalo, N.Y.; San Jose, Calif., and San Francisco were the biggest gainers in apartment availability, while Richmond, Va.; Raleigh, N.C., and Grand Rapids, Mich., had the biggest contractions in supply.
Timing may be another issue. Wells Fargo senior economist Mark Vitner said the second-quarter numbers are showing a strong rent rebound in the most glutted apartment markets like New York City and San Francisco.
Apartment List last month recorded a 2.4% month-over-month gain in Denver apartment rents between April and May, enough to flip what had been year-over-year declines into a 1.2% annual gain. Colorado apartment rents are up 5.5%, on par with the 5.3% gain in rents it measured nationally.
As the amenities and events that made urban living attractive in the first place return and as more workers realize they will be called back to the office, downtown units will start filling up again, Vitner predicts. Developers are also ramping up apartment construction again in a big way again, he said, which they wouldn’t be doing if they perceived that higher vacancy rates were here to stay.
Original content posted by Aldo Svaldi | asvaldi@denverpost.com | The Denver Post June 12, 2021 at 6:00 a.m.
