A new report reveals that rent in Denver fell by more than 5 percent in 2020 — the biggest drop in a decade — even as prices in many parts of the metro area have increased. The data suggests that the exodus from the Mile High City to the suburbs is continuing. And while fallout from the COVID-19 pandemic is definitely a factor in this phenomenon, it's hardly the only one.
The February 2021 Denver rent report from Apartment List reveals that rent dipped 0.3 percent from December 2020 to January 2021, the most recent month for which data is available, and 5.5 percent over the previous year.
Back in January 2020, Denver rent was up 0.6 percent over the previous month, the study points out — and such monthly increases had practically become a tradition. In April 2018, an analysis by RealPage.com, a property-management software firm, showed that rent in Denver had gone up a staggering 48.3 percent from 2010 to the end of 2017. The increase was fourth-largest in the nation during this time, behind only three cities in California's Bay Area.
The current cost shrinkage in Denver isn't mirrored in neighboring and nearby communities, however. According to Apartment List, Parker, which was named the second-best place to live in the U.S. by Money last fall, saw rents go up 3.7 percent in the past year, with Thornton only slightly behind, with a 2.7 percent bump. Many other towns in the metro area tracked by the service saw more modest increases — and while several experienced declines, only Broomfield saw a slide of more than 1 percent year over year.
This graphic offers the details:
Rob Warnock, author of Apartment List's "The Suburban Rent Rebound," explained some of the reasons for the trend during a previous Westword interview.
"Suburban areas have grown in popularity," he maintained, "thanks to the rapid adoption of remote work, increased value of having more space to live and work, and so many people entering the for-sale market. But I think it's important to note that the rental-market trends in our data don't necessarily imply a singular migration pattern from Denver to the suburbs. Certainly that flow exists, but another dimension is people from outside the region who are now moving to Denver's suburban areas instead of moving to Denver proper."
In previous years, he added, "cities like Denver brought in a huge annual influx of out-of-towners looking to take advantage of the strong job market. Now those same movers can access jobs without living as close to the city center. So it's not just a story of people leaving Denver. It's also a story of people not coming to Denver."
The decline in Denver rent prices is "a reaction to softness in the market," he contended. "The once-steady demand that has driven up prices over the years is now decentralizing a bit. As the demand permeates into other nearby markets, the two regions start to converge a bit — prices in Denver begin to dip while the prices in local suburbs begin to rise."
Lower traffic volume as a result of more people working from home also makes suburban living more appealing, Warnock suggested. "The adoption of remote work has definitely chipped away at the physical bonds that once tied together the housing and labor markets," he said. "Pre-pandemic, access to good jobs was largely predicated on being physically close to those jobs. ... That is no longer the case."
And Warnock ended with this: "More and more companies are pushing back office reopening plans, so the city centers that once commanded high rents will continue seeing a soft market."
His prediction has proved accurate, at least in the short term — and there's no indication yet that the downward trajectory of Denver rent prices is nearing its end.
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