Denver reached peak apartment rent? (sales, real estate, 2014)

[Vision67]

https://www.denverpost.com/2018/10/2...rtment-market/

"Apartment rents and vacancies usually move opposite of each other, but they both fell in the third quarter, according to the latest Denver Metro Apartment Vacancy and Rent survey out on Tuesday.

The average apartment rent in metro Denver dropped from $1,484.02 in the second quarter to $1,464.90 in the third, a decline of 1.3 percent or $19 a month. Over the past year, average rents are up 3.4 percent."


"Ron Throupe, associate professor of real estate and construction management at the University of Denver’s Daniels College of Business, argues that new apartments are now being added at a faster pace than new households are forming.

Projections call for 30,000 apartments over the next 30 months and about 22,200 households a year forming in the metro area. Assuming 40 percent of those households choose to live in an apartment, that would mean the market is building 2,600 more units a year than needed, Throupe said.

He expects the apartment vacancy rate to rise above 7 percent."

Usually, the supply overshoots the demand at the end of the cycle.

Are we there yet?

[SkyDog77]

I think we’re close. We were so behind for a while and lots of construction projects were underway to remedy this. They are all starting to come online now. Location and amenities are going to start to matter a lot more.

[daprara]

slow down commercial building projects
rising interest rates & general inflation on the cost of materials




about 2014 Denver area had unique employment opportunities. Now most of the US is doing well.

[Mike from back east]

Some smart people on Wall St think we've been in a recessionary atmosphere all year since the market hit a peak in January and sold off. We're barely higher than that now after a year of trading in a range bound market. Auto sales are down, housing starts are off, cruise line revenues are down 10-16%, IIRC two-thirds of stocks are down for the year, etc, etc. So yes, I think we really are at the end of a very long up cycle. Right now it looks like more of a textbook slowdown and not the systemic collapse of 2008. Next year could get messy.