Apartment Trends Magazine March 2015 | Page 27

ECONOMY ron l. throupe | UNIVERSITY OF DENVER It’s hard to deny: Denver is now a “major” city F or some, rent increases indicate a problem, while for others, it is a sign of a desirable place to live and work. Denver is known to have a highly educated workforce and a greater than average amount of “professional service jobs” compared to national averages (Bureau of Labor Statistics). The Denver metro unemployment rate continues to be below the national average—the US unemployment rate as of November was 5.0%, the Colorado overall rate was 4.0%, and the Denver metro area rate was 3.8%. These numbers are partially a result of job creation, estimated at 40,000 jobs for the metro Denver area this past year, and partially due to existing jobs waiting for those moving into the area. Thus, the future levels of rent increases will be determined by who rents within the Denver metro area and how wage increases relate to rent increases. This quarter saw rents continue to increase while vacancy went up slightly. Traditionally, an increase in vacancy in the 4th quarter is a seasonal increase. The 4th quarter 2014 change was no different and within historical expectations. The previous year the quarterly change for this period was the same percentage increase of 0.8%. What www.aamdhq.org “The old portrayal of Denver being a “cow town” is fading.” is different this year is that rents did not slide or stagnate with the seasonal vacancy increase. Rents for this quarter reached another new high with median rent up $14.49 and average rent up $23.16 per month. The average changing by a greater amount than the median is a reflection of new units at much higher rents than the median. The real question is whether rent