After seeing a steady rise from January through July, rental rates in Denver inched up a modest 0.3 percent in August,according to the report.Median rates for a one-bedroom apartment hit $1,070. Two-bedroom units hit $1,350 in the city. That’s a 3 percent increase over the median rates from August 2016, according to Apartment List. Statewide, one- and two-bedroom rents rose 3.8 percent August to August.
“Rents slowed down a little bit this month. Denver is kind of following the seasonal trend that we expect,” Apartment List researcher Sydney Bennet said, noting that people tend to migrate in the warm weather months, driving up demand and rates. “We expect it to slip a little bit in the upcoming months. Then, next spring and summer we expect to see rent grow again.”
National average rents also rose 3 percent over the past 12 months, the reports says, but overall median rates are much lower. Nationwide, the average rent for a two-bedroom unit is $1,160.
The report notes other major cities saw slower growth in the last year. Rates for two-bedroom units in Portland, Ore., rose 1 percent August to August. In Austin, Texas, Apartment List tracked a 2-percent jump. Washington, D.C.’s median two-bedroom rent decreased half a percentage point over the same period.
Other cities offer more affordable rental units. Phoenix ($1,020) and Minneapolis ($1,150) both offer cheaper median 2-bedroom rents.
Between 2010 and 2015, the Denver metro area added jobs at a much higher rate than it was building new homes and apartments. Over those five years,2.9 new jobs were added for every residential building permit, Bennet said. From 2005 and 2015, the Denver metro area added 1.7 jobs for each permit. Rental rates shot up 52 percent over that time, according to Apartment List. Bennet pointed to one factor in particular contributing to rising rents: an off-balance ratio of new jobs being added in the city to the number of construction permits being pulled for new homes and apartments.
Bennet said she doesn’t see the growth slowing anytime soon, even if average rents dip in the winter when people aren’t moving around as much.
“You’d have to build a lot of housing stock for rent prices to decrease, because you have so much job growth and low unemployment,” she said.
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