The Denver Metro Apartment Association released their 4th quarter report last Friday and it’s amazing to see how the FREE MARKET WORKS. You increase supply above demand and rents drop and vacancies rise. I wish we could get some of the money from pension funds, REITS, and hedge funds that are supplying a majority of the money to build apartments to supply money for single family home builders so that they could build more homes. But, that will probably only happen if those REITs, pension funds, and hedge funds buy homebuilders directly. Here are the highlights from the report-
New renters absorbed 11,821 new apartment units last year, up 6.9% from 2016.

But, builders added 13,348 new units, a whopping 38% more than built-in 2016.
Thus, the vacancy rate increased to 6.4%, up from 5.4% in the 3rd quarter. This is the highest vacancy rate in 7 years.

Average rent in the 4th quarter dropped by $24 from the 3rd quarter to $1396 in the 4th quarter.
Median rent fell by $17 from $1370 to $1353.

The apartment association estimates that there are 131 apartment communities under construction with 31,000 more units in the pipeline. It’s expected that builders will complete 10,000 to 12,000 units this year.

I know banks have been tightening up their guidelines and requiring more money down. I bet after this report some of those 131 proposed new communities will be slowed down or halted.

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