More than 1,450 new apartments opened in 2018 in Fort Collins, but that's only half of what is under development or in the city's planning process at the start of 2019.

The new apartments come on the heels of rapid population growth when builders scrambled to meet pent-up housing demand following the recession.

The 1,457 units — along with 1,000 expected to open by 2020 and another 1,700 in the planning stages — are expected to exceed demand and bring the city's rental market into balance.

While the added units will likely force vacancy rates beyond 5 percent for the first time since mid-2013, they likely will not result in decreased prices. The best renters can hope for is a slowdown in rate hikes, said Brian Mannlein, a director at Cushman & Wakefield commercial real estate in Fort Collins, who specializes in multifamily housing.

More:Developer eyes 300 high-end apartments for north Fort Collins

Fort Collins' vacancy rate in June 2018 was 4.1 percent, twice that of mid-2017, according to the Colorado Multifamily Vacancy and Rent survey conducted for the state Division of Local Affairs.

Typically, increased supply leads to reduced prices, but the city's median monthly rent rose 3.5 percent between June 2017 and June 2018, going from $1,291 to $1,337, the highest median rent in the city's history.

Third and fourth-quarter statistics for 2018 have yet to be released.

Short term, the additional supply of new high-end apartments with stainless steel appliances, quartz countertops, fitness centers and saltwater pools may result in some upfront incentives as property managers work to lease units, said Steve Kawulok, managing director of SVN/Denver Commercial in Northern Colorado.

But it's only good news for consumers "if they can afford the full rent," he said. "They may get one month free but in months two and three they will have to pay the full rents necessary for those units to be built. It's more a matter of, are there people with enough income."

Rents at new projects run between $1,300 and more than $2,000, depending on size.

More:Fort Collins' tight rental market starts to ease but prices remain high

Projects that opened last year including the apartments at Bucking Horse off Timberline and Drake and Cycle apartments at Foothills shopping center are about half full. according to developers.

Both Bucking Horse and Cycle leased throughout the year as buildings were completed. But construction of all 322 and 405 respective units concluded at the end of last year.

To lure tenants, the Apartments at Bucking Horse are offering $300 to $500 off the first three months with a 12-month lease, while Cycle is offering $500 or $750 off January and February rent on select floor plans.

Cycle apartments are expected to be 95 percent leased later this year, said a spokesman for developer McWhinney.

And, Stadium Apartments across from Canvas Stadium at Colorado State University are just about full with college students, according to the leasing office.

With more than 1,000 units under construction and 1,700 in the city's planning process, most real estate experts "are expecting a slowdown," in the market, Kawulok said.

More:240 apartments planned on part of Hansen Farm in south Fort Collins

"We definitely had a shortage of units for the market and we were growing with jobs and population," he said. "Developers rushed back in there. If we find in the next few years that absorption is slow and occupancy is low the signal will go out to the market to slow down."

That's exactly what most market watchers expect.

Across Larimer and Weld counties, overall vacancy rates are at 12 percent, including properties in lease-up (new projects), according to Apartment Insights, a real estate research and consulting firm used by Cushman & Wakefield. The firm said there are a record 2,400-plus units in lease-up throughout Northern Colorado, meaning absorption will be a key measure to watch going forward, Mannlein said.

Like Kawulok, Mannlein anticipates rent increases will level off or slow.

"We still have a healthy apartment rental environment in Northern Colorado, due to migration into our market combined with challenges to deliver attainable for-sale housing within municipalities with high development fees and costly design requirements," Mannlein said.

Higher rents are a direct result of rising construction and labor costs as well as consumer demand for high-end finishes and resort-style amenities. "When you're spending $200,000 to $400,000 (per unit) for modern upscale apartments, you can't have rents at $1,000 a month," Kawulok said. "It just doesn't work for the developer. They don't get the appropriate return on investment."

More:Demo begins to clear way for new student housing on Prospect Road

SVN recently sold an apartment building for $400,000 per unit. "We are just entering new territory," Kawulok said. "It's the cost to play as a developer. The rents they charge have to be appropriate to get the appropriate returns."

Market watchers believe rents are beginning to peak at what the market will bear even though Northern Colorado has ample well-paying jobs, Kawulok said. "There is a certain limit where (rent escalation) has to stop," he said. "That's why we think we will have some moderation. We are right at the peak of where we just can't quite pencil out deals because of rising construction costs."

Apartment construction may eventually slow, but for now it is filling a void created by Fort Collins' expensive single-family housing market and is a popular alternative for Baby Boomers and millennials who like the amenities and the flexibility renting offers, Kawulok said. "As long as there are jobs to support that, they will keep going."

The largest project under construction — 368 market-rate apartments west of the Interstate 25 exit at Harmony Road — is expected to open this year. Lease rates have not been released but will likely fall in line with Cycle, Bucking Horse and Vibe, 276 units off Harmony Road and Lady Moon Drive that opened in the fall.

New projects generally are either market rate or student-oriented units that charge by the bedroom.

The Union on Elizabeth — 402 bedrooms for students — is under construction but won't be finished until late this year or early 2020. "We pulled the plug on trying to deliver in August (2019)," said project co-owner Dino DiTullio.

Student housing projects typically like to be open before students return to the city in August for the fall semester. Most students line up housing before they leave town in May, but leasing is strong through July and early August.

More:Vibe apartments open

Just west of Union on Elizabeth, construction on The Hub is expected to get underway within months. Developer Core Campus Investment Partners of Chicago is redeveloping the former CB & Potts at 1415 W. Elizabeth St. The company applied for a demolition permit at the end of December to raze the shuttered eatery and taproom.

The Hub will offer 212 apartments with 395 bedrooms for students.

Small landlords feel the hit

Dolores Williams owns 14 rental properties throughout Fort Collins and has had more difficulty finding renters in the past few months. She said she hasn't raised her rents and typically charges "a couple hundred" less than market rate.

"I think it will be harder as they keep building," she said.

The apartment market might be good and bad news for small landlords, Kawulok said. While it won't suddenly allow landlords to raise their rents significantly without losing tenants, it could spur redevelopment of older properties, he said.

Owners of "property that is 20 years old and built at half the cost of current buildings may have enough margin that maybe they can improve their properties and raise rents and still be under what brand-new apartments are," he said.

Landlords won't try to match new properties item for item but they can improve their units, raise rents between what they are now and new property and maybe attract tenants that way, Kawulok said.

More:More apartments for growing River District get support from Downtown Development Authority

The real losers in the escalating apartment market are minimum-wage and lower-wage workers. "The ones barely affording Class C (lower tier) apartments will be challenged because C properties will start rising because there will be a gap there and landlords might need to move (rents) up to do some renovations.

"The ones barely getting by will be more challenged.." Kawulok said. "It's the same affordability crisis that is occurring across the nation. Housing has just gone up and not everyone can afford it and those on the low end will have a hard time affording it."

At a glance: New Fort Collins apartments

Who opened in 2018:

Bucking Horse: 322 units. Off Timberline and Drake. Rents: $1,350 (studio) to $2,110.

Cycle: 405 units at Foothills shopping center. Rents: $1,200 (studio) to $1,819 (2 bedroom, 2 bathroom).

Village at Horsetooth: 96 units. 1506 Horsetooth Road. For lower-income residents.

Stadium Apartments: 102 units (388 beds). 821 Lake St. Student oriented. Fully furnished; rents by the bedroom starting at $735.

Vibe: 276 units. Harmony Road and Lady Moon Drive. Rents: $1,195 (studio) to $1,725.

Flats at Rigden, 2708 Illinois Drive, 100 units.

Copperleaf Place. 94 units, 3425 S. Shields St. Rents from $1,030 (studio) to $1,650.

The Union on Plum: 62 units (229 bedrooms), Plum Street. Studen oriented. .

Total: 1,457units — 1,197 market rate units; 96 low income; 102 student oriented.

Who will open in 2019/2020

Lake Street Apartments: 59 units (191 beds). 605 and 609 Lake St. and 300 Blevins Court. Student oriented.

The Standard: 230 units (794 beds). Between Lake Street and Prospect Road. Student oriented.

Village Cooperative: 52 apartments for seniors. (requires buy in plus monthly fee).

The Wyatt: 366 units. Southwest corner of Harmony Road/Strauss Cabin Road.

Union on Elizabeth: 107 units (402 beds), West Elizabeth and Shields St. Student oriented. Expected opening: Late 2019 or early 2020.

The Hub: 212 units (395 beds) former C.B. & Potts on West Elizabeth Street. Student oriented.

Total: 1,026 — 366 market rate; 608 student oriented; 52 age restricted.

What's in planning stage:

The Retreat: 190 units/793 bedrooms. Northeast corner Redwood Street and Suniga extension. Student oriented.

Brick Stone: 116 units, two blocks east of the intersection of Harmony Road and College Avenue.

The Overlook: 105 units. 3710 John F. Kennedy Pkwy.

Ridgewood Hills, fourth filing: 146 units at Avondale and Triangle Drive.

Watermark Residential: 300 units. Spaulding Lane south to East Willox Lane.

Grandview Heights: 50 units along Hickory Street in north Fort Collins.

320 Maple St., 29 units at the northeast corner of Maple and Meldrum streets.

Wingspan: 240 units on former Hansen Farm northwest of intersection of Timberline and Zephyr roads.

St. John XXIII and Blackbird Investments: 250 units (600 beds), 1220 University Ave. Student oriented.

Penny Flats North: 64 units north of College Avenue and south of Mason Street.

College and Drake: 200 units in proposed redevelopment of Spradley Barr Mazda dealership.

Total: 1,690 — 1,250 market rate; 440 student oriented.

Source: City of Fort Collins and Coloradoan research