Denver’s Rental Market in 2025: Are Prices Finally Stabilizing?

Denver’s Rental Market in 2024: Are Prices Finally Stabilizing?

As 2024 unfolds, Denver’s rental market, notorious for its rapid price increases over the past decade, shows signs of potential stabilization. After years of rising demand and skyrocketing rents, experts and renters alike are watching closely to see if the market will finally cool down. But are prices truly leveling out, or is this just a temporary pause before more hikes?

In this blog, we explore the current state of Denver’s rental market, focusing on price trends, vacancy rates, and what renters can expect in the coming year.

Price Stabilization: A Glimmer of Hope?

According to recent data from Westword, Denver’s rental prices appear to be stabilizing after years of significant increases. The average rent in Denver rose by 7% in 2023, bringing the median monthly rent for a two-bedroom apartment to approximately $2,797. However, as we enter 2024, growth in rental prices has begun to slow, offering some hope for renters who have struggled to keep up with rising costs.

While the overall trend suggests some stabilization, rents in popular neighborhoods and newer developments remain high. The luxury rental market, in particular, continues to push prices upwards, driven by demand from high-income renters. This discrepancy means that while some areas may see moderate price increases, others could remain expensive as developers continue to focus on luxury projects.

The Role of Vacancy Rates

Another key factor influencing Denver’s rental prices in 2024 is the vacancy rate. As of late 2023, Denver’s vacancy rate had increased slightly to 5.1%, which is still low but represents a shift from the ultra-competitive market of previous years. The increase in vacancies is largely due to new apartment developments, which have added thousands of new units to the market.

For renters, this uptick in vacancy rates is a welcome sign, as it typically leads to greater negotiating power and more options when searching for an apartment. In fact, some landlords have started offering incentives such as reduced rents or a month’s free rent to attract tenants. These incentives are more common in high-end apartment buildings, where vacancies are slightly higher.

However, despite these changes, demand for rental housing in Denver remains strong, particularly in centrally located areas. This means that while some renters may find deals or incentives, others may still face stiff competition for more affordable units.

Impact of New Construction on Prices

The surge in new apartment construction is playing a significant role in shaping the rental market in 2024. Denver has seen a boom in construction, particularly in the luxury sector, with thousands of new units hitting the market over the past few years. This increase in supply is helping to ease pressure on prices, particularly in high-end buildings where vacancies are starting to climb.

According to a Relocity report, most of the new apartments in Denver are luxury units with high-end amenities, such as resort-style pools, fitness centers, and rooftop lounges. These developments are attracting renters who are willing to pay premium prices for upscale living, but they are also pushing middle-income renters to search for more affordable options further from the city center.

With more units available, experts believe that rent growth in the luxury segment may slow, as developers compete to fill vacancies. However, for those seeking budget-friendly apartments, the situation is less optimistic, as affordable housing remains scarce.

What Renters Can Expect in 2024

For renters in Denver, 2024 offers a mixed bag of possibilities. On one hand, the potential stabilization of prices and the increase in vacancy rates provide some relief. Renters may find more options and even negotiate better deals in certain areas, particularly in newly developed luxury buildings.

On the other hand, competition for affordable housing remains fierce, and prices in popular neighborhoods are unlikely to drop significantly. With mortgage rates still relatively high, many potential homebuyers are remaining in the rental market, contributing to strong demand and keeping prices elevated.

Here are a few things Denver renters should expect in 2024:

1. More Negotiating Power: With vacancies slightly up, especially in luxury buildings, renters may be able to negotiate lower rents or secure special deals, such as a free month’s rent.
2. Continued Price Pressure in Affordable Units: Despite new developments, affordable housing remains scarce, and demand for mid-range apartments is still high. Renters seeking affordability should act quickly and be prepared for competition.
3. Luxury Market Saturation: As more luxury units come online, developers may struggle to maintain high occupancy rates, leading to possible price reductions or incentives in this segment.

Final Thoughts: Is Stability Here to Stay?

While Denver’s rental market shows signs of stabilizing, particularly in the luxury segment, it’s unlikely that renters will see dramatic price drops in 2024. The combination of new construction and slightly higher vacancy rates offers hope for relief, but demand for housing remains strong, especially in prime neighborhoods and affordable units.

For renters, the key to navigating the market in 2024 will be staying informed, acting quickly, and considering a wide range of options, from luxury apartments with incentives to budget-friendly units in up-and-coming neighborhoods.