Metro Denver’s average apartment rent reached a record high of $1,371 in the second quarter, according to a quarterly survey from the University of Denver’s Daniels College of Business, Colorado Economic and Management Associates, and the Apartment Association of Metro Denver.

Newer units, which demand higher rent, pulled the average above the median of $1,324 DU associate professor of real estate Ron Throupe said.

He found the average vacancy rate for metro area apartments dropped to 5.4 percent from 6.1 percent in the first quarter. It was 6.8 percent in the fourth quarter.

Vacancies rose last year as developers put a large number of apartments on the market. They continue to build, adding 2,442 new units in the second quarter, but renters absorbed 4,189 units, causing the vacancy rate to fall.

As the market has tightened, prices have gone up: Throupe found rents increased by $56 in the second quarter. The first-quarter figure of $1,315 had been a high at the time.

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August 27, 2020 Denver rental search data points to less interest from out-of-towners during the pandemic “The upward cycle in rent growth resulting from the demand for units continues to impress as Denver becomes a destination for business and a top-rated place to live,” Throupe said in a statement.

Rents are also rising because developers have focused on adding “luxury” apartments in places like downtown Denver and central Boulder. As those become a larger part of the mix, they push up the average rent.

But landlords, in an effort to lure new tenants, are also offering more concessions. The “economic vacancy” rate, which accounts for discounts like a month or two of free rent, is at 14.3 percent, up from 13 percent in the first quarter.

Rising rents continue to drive competition for more affordable units, especially in the northern and eastern suburbs. Wheat Ridge, north Aurora, central Aurora and Arvada were the hottest submarkets in the metro area.

Wheat Ridge had a very low 1 percent vacancy rate in the second quarter, while north Arvada had a 2 percent vacancy rate, the report said.

The study has been conducted every quarter since 1982, Throupe said. It includes Adams, Arapahoe, Boulder, Denver, Douglas and Jefferson counties.