1st Quarter 2024 Vacancy & Rent Report Reveals Market Stability

Vacancy levels remained flat at 5.8% for the first quarter of 2024, the same as last quarter. Average rent also remained essentially flat, with just a $5 increase from $1,870 for the fourth quarter of 2023 to $1,875 - according to the latest Vacancy and Rent report.

“Over the 44-year history of this report, average rent growth in any 18-month period is generally 5.7%,” said Mark Williams, executive vice president for the Apartment Association of Metro Denver. “This last 18 months, the rate of growth was 0.3%, which is great news for renters.”

The report shows vacancy rates increased slightly in Adams, Douglas, and Jefferson Counties but decreased slightly in Boulder/Broomfield and Denver. Vacancies remained flat in Arapahoe County. 

“The largest vacancy increase was 150 basis point in Denver Southwest. The highest vacancy – 7% – was in Thornton/Northglenn, just beating downtown Denver at 6.9%. The lowest vacancy was found in Aurora north, just 4.2%,” said the report’s researcher, Cary Bruteig with Apartment Insights. “The newest buildings (constructed since 2020) still had the highest vacancy at 6.7%, an increase of 0.1% over last quarter. On the other hand, buildings constructed prior to 1970 continue to have the lowest vacancy at 4.5%, even lower than last quarter’s 4.9%.”

While vacancy rates have remained flat, that does not discount the need for more housing across the metro area.

“Despite what the data shows, we still need to expand housing availability. We must continue to advocate for more housing development as the best solution to affordability,” said Drew Hamrick, senior vice president for government affairs and general counsel for the Apartment Association of Metro Denver.

Among different types of apartments, studios had a slight improvement in vacancies from last quarter, now at 7.3% vacant, which is the highest rate. One-bedroom apartments had a vacancy rate of 5.7%, while two-bedroom/one-bath units were the lowest at 5.4% vacant. Two-bedroom/two-bath apartments were at 5.8% vacant, and three-bedroom units were at 5.9% vacant.

“While the stable rental rates over the last 18-24 months are good for the rental market, the numbers also signal red flags for investors, developers and management companies,” Williams cautioned. “In the face of serious increases in expenses, interest rate challenges for loans, and poorly thought-out legislation, rents are essentially level with where they were 18 months ago. The explanation for that is increased supply, in the form of 27,000 new apartments over the last 24 months – higher than the historical average of 10,000 units over 24 months. We continue to urge legislators to adopt a more balanced approach, taking into account the perspectives of all stakeholders, to ensure that policies promote both housing affordability and a conducive investment climate."

 “The report shows 5,144 new apartments were added into the rental housing market in Q1, that compares to about an average of 2,900 units per quarter over the past four years,” explained Bruteig. The number of new apartments built in Q1 marks the biggest increase since late 2020. Over the past year, a total of 14,819 new units were added, the most in a long time. 

In the recent quarter, the greater Denver area saw 5,034 new apartments rented (absorbed), the largest gain since 2Q 2021. In the past 12 months, 13,159 apartments were absorbed, the highest annual number since 2021.

These numbers were compiled by Apartment Insights, which collected the data from 240,975 apartment homes.