According to the Denver Post today, the average per month cost of a rental in the city has climbed to $1,117. That’s up from $1,041 at the end of last year. The main reason is the extremely low vacancy rate, only 4.7 percent of apartments are vacant. That’s down from 5.1 percent from the first quarter of this year.
Many discounts are available, most in the form of landlord concessions, but that doesn’t seem to be stemming the tide of skyrocketing rents. The average discount is currently around 9.3 percent. Unfortunately, that’s almost the same percentage that rates rose since the beginning of the year, so it really doesn’t help much.
Add to that the gentrification of many neighborhoods, such as the Five Points and The Highlands, and there is a recipe for a very high cost of living increase in a city that already ranks 6.5 percent above the national average. The gentrification has also led to some social strife, with racist pamphlets being spread earlier this year in Northwest Denver.
It’s not all bad, however. The increase in rent show a massive influx of people moving to the MIle High City in search of better opportunities. Crime rates have fallen drastically, though many credit the legalization of marijuana for that. Forbes lists Denver as the fourth best metro area in the country for business and careers.
All in all, Denver is booming right now, and that’s great for landlords, businesses and newcomers. But locals are feeling the pinch as they’re suddenly priced out of the places they’ve lived for a long time.
The Post also reported that the metro area added 1,261 new apartment units in the second quarter, bringing the total inventory to 298,461 units. It’s simply a matter of supply being unable to keep up with demand. A large portion of the new units are also being built in more upscale areas, or being nicer units within an area that was previously lower priced.
"The state of Colorado believes that we will create seven jobs every hour in 2014," said Jeff Hawks of Apartment Realty Advisors in a statement. "Five Colorado residents turn 20 years old every hour, but we are only delivering one new apartment unit per hour."
However you look at it, higher prices and fewer places to live seems to be the new norm in Denver.