Seasonal Patterns Benefit Rate Movement
The Denver multifamily market regained its footing as it entered the second quarter of 2023, with rents finally inching up after five months of declines. Up 0.2% on a trailing three-month basis through April, growth was on par with the U.S. figure. Meanwhile, the average rate was $190 above the $1,709 national figure. Occupancy declined to 94.8%, impacted by a steep decrease in the Renter-by-Necessity segment.
Denver unemployment stood at 2.7% in March, 60 basis points below the March 2022 rate, slightly below the state (2.8%) and tighter than the U.S. figure (3.5%). Job growth continued to taper off, at 2.1%, or 26,100 jobs, in the 12 months ending in February, mainly supported by professional and business services and leisure and hospitality, which added 21,300 jobs combined. In 2022, passenger volume at Denver International Airport surpassed 2019. As part of the final phase of an expansion, 22 gates opened in late 2022. The extension should help the airport keep its status as the third busiest in the world. Three sectors lost jobs—trade, transportation and utilities, information and financial activities—for 10,500 positions combined.
Developers delivered 1,473 units through April and had another 34,751 units under construction, with both recent stock and the current pipeline heavily favoring upscale development. Meanwhile, investment dwindled, with $421 million in multifamily assets trading through April, for a per-unit price that plummeted 31.0%.
Read the full Matrix Multifamily Denver Report-June 2023