By Shawn Chitnis
DENVER (CBS4)– A new report out this week shows several neighborhoods in Denver where rent decreased over a one-year period including in LoDo, surprising some experts and even residents that say the market doesn’t reflect that change.
“It’s out of control,” said Paige Mainor, who has lived in LoDo for three years. “With all the building that is going on it should be driving down the price but I’m not seeing that.”
Zumper, a website for the rental market in major cities across the U.S. including Denver, releases regular reports on prices. The data is made up of new listings on their site available at that time as well as information they get from third parties. The drop of 7.49 percent in LoDo was from December 2016 to December 2017. But the rent remains high and above the city average with a one bedroom unit running $1,730 a month.
“I’ve actually been asked to pay more starting in April for the next year,” said Aaron Davis, another resident in downtown.
The report surprised those currently living in the neighborhood because they are in the middle of leases at set prices and find landlords asking for an increase in rent when it is time to renew.
But Winter is a slow time for new leases and prices are expected to be cheaper when fewer people are moving, given the colder weather.
“I’m always skeptical of data,” said Ron Throupe, a professor at the University of Denver. “How much was collected, how many apartments, are they new or old. What’s the breath of the data?”
Throupe releases a quarterly report on the market for DU. He says you always have to look at multiple sources to get an accurate read of the trend on prices. He says this drop for certain neighborhoods is likely seasonal but does note that new construction constantly impacts the balance of supply and demand.
“We’re always going to have markets and new neighborhood areas that are building new, more than others,” he said. “So there’s more price competition, more units available.”
Rent is up more than 15 percent for 2017 across the city and Denver is the 18th most expensive rental market in the country, according to Zumper. Staff tell CBS4 that the trend of popular neighborhoods seeing a drop in rent is happening in other major cities like New York and San Francisco. Those neighborhoods do not have as much room to offer new properties as other parts of these cities that can attract new tenants and therefore see the rent increasing in developing areas.
Throupe focuses on real estate at DU. He says his research supports the trend Zumper is seeing in major cities.
“It may not be available in more desirable neighborhoods locked down in existing buildings.”
Beyond LoDo, several other neighborhoods saw a drop in rent for the same period between nine and 20 percent.
The five spots with the largest drop were Berkeley, Whittier, Dayton Triangle, Elyria Swansea, and the Central Business District. Several neighborhoods also saw rent increase in that year. The changing market is always on the mind of residents, even if they are in one of the most coveted corners of Denver.
“I love the neighborhood,” said Mainor. “I love what’s going on, I would like to stay but they make that pretty difficult.”
The report is a snapshot in time and one of many sources of tracking the city. Throupe says to get a better impression tenants need to wait until the summer.
“We probably won’t see the trend until June,” he said. “Whether we’re going to continue with price movement and a lot of demand for new units or are we going to start to slump back.”
Regardless of what residents are seeing or reading, they are always open to a better offer in this competitive market.
“I’ve actually spent a fair amount of time today looking at apartments in different neighborhoods,” Davis.
LINK: Zumper Denver Rent Report