average rent
average occupancy rate
ytd sales volume
YoY rent change
yoy occupancy change
individual transactions
QUARTERLY DEMAND
YTD: 6,886
QUARTERLY COMPLETIONS
YTD: 7,828
Average Monthly Mortgage Payment
Average Monthly Rent
Due to rebounding absorption rates, market-wide occupancy in Denver edged up a modest 0.1 percentage point from the previous quarter to 94.2% in the third quarter; however, it registered a 1.0-point decline year-over-year. Within the various asset classes, Class B properties led in occupancy at 94.4%, closely followed by Class C units at 94.3%, while Class A lagged slightly behind at 93.7%. When broken down by submarkets, occupancy rates varied, ranging from a low of 92.6% in North Aurora to highs of 95.3% in both the Broomfield and Parker/Castle Rock areas.
In Q3 2023, improved demand in Denver’s apartment market translated into limited pricing power for operators, as effective asking rents increased by 1.0% on a quarter-over-quarter basis. Despite its modest annual growth rate of 0.7%, the market exceeded the national average of 0.4% for the same period. This quarter’s growth was primarily driven by a 1.4% annual increase in Class A properties, which contributed to elevating the market average. In contrast, Class B units exhibited a more subdued growth rate of 0.8%, and Class C units saw a minor decline of -0.1%, subtly affecting the broader market dynamics. Of Denver’s 19 submarkets, only three experienced stagnation or decline in annual rents. Westminster led with a 3.0% increase, while Southeast Aurora/East Arapahoe County recorded the most significant rent reduction at -2.1%.
| Submarket | Average Occupancy | Annual Occupancy Change | Average Monthly Rent | Annual Rent Change |
|---|---|---|---|---|
| Downtown/Highlands/Lincoln Park | 93.4% | -1.3% | $2,316 | 0.0% |
| Five Points/Capitol Hill/Cherry Creek | 93.7% | -0.9% | $2,118 | 00.0% |
| South Denver/Englewood | 94.5% | -1.0% | $1,924 | -0.6% |
| South Lakewood | 95.0% | -0.5% | $1,864 | 1.5% |
| North Lakewood/Wheat Ridge | 94.9% | -1.4% | $1,833 | 2.3% |
| Arvada/Golden | 95.0% | -0.9% | $1,953 | 2.2% |
| Westminster | 93.9% | -1.4% | $1,776 | 3.0% |
| Broomfield | 95.3% | -0.1% | $1,981 | 0.8% |
| Thornton/Northglenn | 93.5% | -1.0% | $1,788 | 00.0% |
| Northeast Denver | 94.1% | -0.9% | $1,984 | 1.2% |
| Glendale | 94.3% | -0.8% | $1,640 | 1.1% |
| Southeast Denver | 94.2% | -1.5% | $1,710 | 0.9% |
| North Aurora | 92.6% | -3.0% | $1,626 | 1.5% |
| Southwest Aurora | 94.5% | -1.6% | $1,654 | 0.7% |
| Southeast Aurora/East Arapahoe County | 93.8% | -1.3% | $1,896 | -2.1% |
| Tech Center | 94.6% | -0.6% | $2,013 | -0.7% |
| Littleton | 94.5% | -0.9% | $1,980 | 1.3% |
| Highlands Ranch | 94.1% | -0.1% | $2,183 | 2.5% |
| Parker/Castle Rock | 95.3% | 0.2% | $1,981 | 00.0% |
| Denver-Aurora-Lakewood, CO | 94.2% | -1.0% | $1,924 | 0.7% |
Units Under Construction
Units UC Delivering In the Next 4 Quarters
Transaction dollar volume for single asset conventional multifamily trades in Denver totaled roughly $1.58 billion through the 3rd quarter 2023, down about 44% year-over-year. That deal volume ranked tenth nationally. Meanwhile, the number of transactions decreased about 42% compared to the same timeframe last year, with 56 apartment properties trading hands. Meanwhile, the average price per unit in Denver-Aurora-Lakewood came in at roughly $313,500, down 4.2% annually. Denver average price per unit landed below the norm for the West region ($301,000) but above the U.S. average ($219,700).
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual conventional MF transaction $2.5M +
As of August 2023, Denver’s employment landscape presents a mixed bag of growth and contraction across various sectors. With an annual job change of just 2,100 positions, the overall employment growth stands at a modest 0.1%, but it fares well with a low unemployment rate of 3.6% compared to the national rate of 3.8%. The Government sector led the charge with a 3.8% increase, adding 7,700 jobs, followed by Other Services, which grew by 6.1% with 4,100 additional positions. Meanwhile, sectors like Leisure and Hospitality and Manufacturing saw moderate growth, increasing by 1.8% and 1.5%, respectively. On the flip side, Financial Activities experienced the most significant decline, shedding 6,300 jobs, a contraction of 5.4%. The Information sector also retracted by 4.8%, losing 2,600 jobs.
August Annual Jobs Created
August 23 Employment growth
August 23 Unemployment rate
3.8% us august rate
| Sector | Change from August 2022 to August 2023 | Percent Change |
|---|---|---|
| Government | 7,700 | 3.8% |
| Other services | 4,100 | 6.1% |
| Leisure and hospitality | 3,200 | 1.8% |
| Manufacturing | 1,100 | 1.5% |
| Mining, logging, and construction | 900 | 0.8% |
| Professional and business services | 100 | 0.0% |
| Information | (2,600) | -4.8% |
| Trade, transportation, and utilities | (3,000) | -1.0% |
| Education and health services | (3,100) | -1.6% |
| Financial activities | (6,300) | -5.4 |
Denver presents a more budget-friendly alternative to San Francisco across multiple metrics, according to the latest Cost of Living Index. With an index score of 110.2, Denver is significantly more affordable than its Bay Area counterpart, particularly in housing, where costs are 54.5% lower. Utilities and transportation further the cost advantage, being 34.4% and 23.5% less expensive, respectively. Even in categories like groceries and healthcare, Denver residents find themselves spending 21.0% and 22.0% less. All in all, Denver offers a more economical standard of living while still providing a vibrant urban experience.
110.2
$4,876
130.9
82.5
100.4
$674,000
Amid a nationwide softening of demand in late 2022, Denver’s apartment market has rebounded robustly, driven by a strong economic recovery. As we move into 2024, the market appears to be on firm ground, and its capacity to absorb an influx of new supply will be a critical factor. Denver’s housing inventory is projected to expand by approximately 22,000 units, or around 6.7%, over the coming year—setting a new record by a considerable margin. Construction efforts remain largely focused in the urban submarkets of Downtown/Highlands/Lincoln Park and Five Points/Capitol Hill/Cherry Creek but have also intensified in other areas. While Denver’s performance may continue to lag behind the U.S. average, robust demand, economic vitality, and favorable migration trends are likely to underpin solid market fundamentals in the foreseeable future.
