VACANCY & RENT
RON THROUPE | UNIVERSITY OF DENVER
Rents and Vacancy Detangle as
COVID-19 Effect Still in Flux
The second quarter
Denver Metro
Apartment
Vacancy and Rent report
showed a decrease in
rent, although demand
pressure was evident by
a decline in vacancy. The
second quarter of 2020
does reflect effects of
COVID-19 as the quarterly
data is requested as it is as
of June 10, 2020.
90%
80%
70%
60%
50%
40%
30%
20%
The Metro Denver
apartment market showed
10%
an overall quarterly
0%
decrease in vacancy to
5.1% from 5.9%, with a
year over year increase of
0.1% from 5.0%. Vacancy
decreased for all counties reported. The
Denver Metro apartment market added
1,170 new units with most of those being
in Denver County (936). Net absorption
was 3,801 units for the second quarter.
While the second quarter has become
the quarter where we tend to see the
greatest rent increases for the year, the
overall average rent decreased $29.99,
from $ 1535.70 to $1505.71 from the first
quarter results. The year over year change
from second quarter 2019 ($1519.80)
results in a yearly decrease of $14.09.
Median rent moved down from first
quarter 2020’s $1475.43 to $1453.97, for a
quarterly change of $21.46.
Secondary indicators reveal potential
COVID-19 dynamics. The unit turnover
percentage was dampened to 3.7% for the
quarter, where this figure would typically
be expected to range from 4.5% to 5% for
spring moves. This is likely a COVID-19
What percentage of this property’s total tenants did not pay in a
Given Month and were not evicted due to COVID-19 related
considerations?
0-4.99% 5-9.99% 10-14.99% 15-19.99% 20-24.99% 25+%
April May June
effect, combined with management
firms’ not enforcing evictions for nonpayment.
Economic vacancy (vacancy +
concessions + write-offs) declined from
a first quarter number of 13.3% to 12.1%.
Rental losses (discounts/concessions,
delinquents, and bad debt) were at 5.6%
compared to 5.7% for the first quarter of
2020. These may be surprising results to
some with the concerns of non-payment
by renters and potential job losses.
The results say the opposite, as people
appear to have hunkered in place with
non-payment of rents being less than
5% of total renters for the majority of
communities.
As part of a special survey of
COVID-19 effects, the participants
for this quarter were asked about the
delinquency patterns for the months of
April, May, and June. The results show
that the amount of non-payment was
low, with the majority of respondents
saying their results show less than 5% of
tenants not paying. But there was some
erosion of rent payment as we move
from April to June as the percentage of
communities experiencing a 5-9.99%
of non-payment increased, as the 0-5%
response incrementally decreased. Many
responses to the special survey questions
mentioned rent deferral programs in
place during these months, illustrating
that both locally, and nationally, there has
been some slow payment of rents. As
the COVID-19 pandemic continues and
government relief programs expire or are
revised, future rent variations may appear,
and we’ll continue to track the trends.
www.aamdhq.org
AUGUST 2020 TRENDS | 31