Median rents in the Denver metro area increased by 13 percent year-over-year in the first quarter, and average rents climbed 12 percent, according to the latest data from the Apartment Association of Metro Denver.
The median rent for all sizes of units metro-wide hit $1,158 per month in the first quarter, up from $1,021 in the same period of 2014. Average rent increased to $1,204 per month from $1,073.
“It’s important to look at both median and average rent, because the overall average rent of $1,204 is being skewed to some degree by the newly constructed Class A buildings,” said Mark Williams, executive vice president of the Apartment Association of Metro Denver.
Quarter-over-quarter increases for both median and average rent were less dramatic than yearly increases, a demonstration of some moderation when compared to other cities, according to the Apartment Association.
In the first quarter, both median and average rents were 3 percent higher than in the fourth quarter of 2014.
“Denver’s rental market may be a concern to some, but in comparison to other major cities, Denver rents are moderate,” the report said, comparing the rental rate for a one-bedroom apartment in Denver County to that of other large cities across the country.
The median rent for a one-bedroom in metro Denver in the first quarter was $1,039 per month. The Apartment Association places Denver in the middle of the pack with other large cities, with San Francisco on the high end with one-bedroom apartments going to $2,100 per month and Dallas on the low end, with one-bedrooms renting at $786, according to data from Pierce-Eislen, a multi-family analysis firm.
Other cities with rents still higher than Denver’s are Los Angeles, Boston, Washington, D.C., and San Diego.
The vacancy rate in the metro fell slightly to 4.9 percent from 5.1 percent at the same time last year, but increased from the 4.7 vacancy rate in fourth quarter.
“For some, the rent increases signal a problem, while others view it as a sign of a desirable place to live and work,” the report said.
“The frenzy to build more apartments to meet rising demand will produce healthy competition between both new and existing apartment properties,” said Vivian Markham of Silva-Markham Partners, a Denver property management company. “Property management companies have come to consistently expect high occupancy, and as the market changes, we must be diligent and creative order to deliver even better results to our clients and our residents.”