Apartment rents in Denver are dropping more than the official data suggests, according to a new report from the Apartment Association of Metro Denver.
The average rent in Metro Denver fell 5% in a year to $1,816 at the end of the third quarter. It’s also down from the second quarter’s $1,832 monthly rent.
But those are reported rents, Mark Williams, AAMD’s executive vice president, said Tuesday during a news conference. Landlords have been offering more concessions than ever before, mainly discounts. Add in such concessions, and you get what’s called the “effective rent.”
“If you go back just two years and look at the effective rent, it was about $1,875 on average. Today, it’s closer to $1,710, so that’s about $165 bucks a month,” or about 9%, Williams said. “I think one of the biggest messages that is going on in our market right now is that it’s a great time to get off the sidelines and become a renter. It’s a perfect time to move out of your parents’ home or maybe you’ve got a roommate that you’re not perfectly aligned with.”
Rents flattened during the pandemic and stayed the same as evictions were put on hold. But by 2022, average rents began climbing again though after peaking last year, they’ve been flat or falling in the Denver metro.
In the third quarter, average rents fell in every county from a year earlier, though Douglas County saw the smallest decline, down 1.4% to $1,855. Arapahoe County had the highest one-year change for the third quarter, to $1,701, down 7.2%.
Some of the drop in average rents has to do with more supply. So far this year, 12,243 new apartments have been added in the seven-county metro Denver region. There are now 446,708 apartment units, an increase of nearly 40,000 in two years. With more to fill, more are sitting vacant, which pushed the average vacancy rate up one percentage point in a year to 6.3%.
But the other nugget that the apartment industry officials shared was that higher-income occupants were “renting down,” or essentially leasing lower-priced apartments even if they could afford much more expensive places.
“We live in a market where we’ve got a lot more higher income people than lower-income people, at least compared to national averages,” said Drew Hamrick, AAMD’s vice president of government affairs. “If you’re at the lower end of the income scale, you’re forced to pay 30% of your income for your housing. But at a high-income scale, you’re not. You may choose to, for a host of reasons, availability being one of them, to cannibalize that lower level housing for yourself.”
Hamrick shared a chart showing that the highest earners were renting apartments at every price level, including the least expensive. In other words, folks making more than 120% of the area’s median income — or earning more than $117,720 for one person in Denver this year — are renting a large chunk of the apartments typically for “workforce housing,” or those with wages that are 80% to 100% of the area’s median income, he said.
“We’re always advocating to get more total units. It doesn’t matter what (price) category because every housing unit has a consumer and once their housing need is filled, that’s one less person looking,” Hamrick said.
Since the start of 2020, more than 85,000 new apartment units have been added to the metro-area’s apartment inventory. With another 5,000 expected to be completed this year, the region would hit a milestone of 450,000 units though Scott Rathbun, a researcher at Apartment Insights, said that adding 5,000 more this quarter “seems aggressive, considering we only completed 10,000” so far in 2025.
As some of the newer luxury properties in Denver are finding, concessions are still needed.
The newer Velaris Living in downtown Denver is offering two months of free rent plus a $500 “Look & Lease” incentive for those who check out a unit and sign a lease in the 22-story luxury building on the same day. Tiny studios start at $1,260 a month.
To the north in the Sunnyside neighborhood, Ironworks on Fox advertises “up to 10 weeks free,” with rents for a luxe studio starting at $1,595.
And at the Avalon Governors Park on East Seventh Avenue, where a studio is $1,470 a month, the advertised move-in special is 3 months free for those who apply by Halloween. There’s also no application fee.
“Concessions have reached an all-time high,” said Rathbun, whose company has worked on the AAMD quarterly reports for 20 years. “The concession reached 5.8% this quarter, which represents a three-week rent-free concession on average for every property in the Denver Metro area.”
