Denver Rental Market Offers Attractive Incentives amid Surge in Supply
The Denver rental market presents a favorable opportunity for renters with falling rents and a plethora of incentives offered by new construction projects. Six to ten weeks of free rent, discounted parking, and gift cards have become commonplace, according to brokers.
Factors Driving the Shift
A construction boom has resulted in thousands of new units in the Denver metro area, particularly in the urban core. Initially driven by population growth and remote work demand, this development has outpaced current demand. As a result, rental supply has exceeded demand, leading to a decline in prices.
Rent Reduction and Incentives
Rents for apartments with up to two bedrooms declined by 5.9% last year, a sharper decrease than other pandemic-era migration hotspots such as Austin and Nashville. Even renewing renters are securing incentives, with one-month free rent becoming more common.
Impact on the Market
Despite the incentives, Denver remains an expensive city to live in. The median apartment rent hovers around $1,800 per month. However, falling rents and incentives have enabled middle-income workers to secure apartments in amenity-filled new buildings.
Buyer Challenges Persist
Prospective buyers face a different scenario. While inventory levels have improved, single-family home prices remain near record highs. High mortgage rates, insurance costs, and economic uncertainty have hindered sales in the metro area. Affordability remains a challenge, as purchase prices can be significantly higher than the cost of renting a comparable property.