We are still seeing new renters moving to Denver, but the number of out of state renters has decreased since the COVID pandemic started. Will this trend continue long term or is this just a blip due to short term economic impact and travel restrictions?
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Principal | AQYRE Real Estate Advisors
Denver remains a hot ticket for renters looking to move from other places, but new data shows that since the arrival of the coronavirus pandemic almost two-thirds of searches for rental properties in the Mile High metro have come from people who already live here, a significant increase from a year ago.
Apartment List released its latest renter migration report last week, analyzing data from millions of searches on its rental platform between April 1 and Aug. 11.
During that time frame, 37.3% of people looking for rental properties in the Denver metro area were folks living elsewhere. Over that same period in 2019, 42.6% of Denver rental searches were coming from outside the Mile High Metro.
There are, of course, caveats to that observation, said Igor Popov, Apartment List’s chief economist.
“Denver has just been on a tear. In the 2010s, the inbound rental demands it was seeing from other parts of the country was wildly impressive,” Popov said. “And it has slowed down, but it still has one of the highest shares of out-of-towners looking.”
While still way ahead of markets like Houston, Cincinnati and Detroit, Denver’s search decline mirrors what Apartment List analysts saw in other tech hub cities like San Francisco, Seattle, and Austin, Texas. The report’s author theorizes those markets are especially vulnerable to a double impact of being too expensive for renters dealing with job or income losses brought on by the pandemic and the tech sectors’ early and ongoing embrace of work-from-home business models, which means more of their workers can be employed in Denver without living here.
Outside of the Bay Area, Denver metro rents rose faster than in any other place in the country in the 2010s, according to a 2018 report from real estate research firm RealPage. The average monthly rent in Denver fell by 2.1% in the second quarter of this year compared to the second quarter of 2019, according to Apartment Association of Metro Denver data. But renters still shelled out $1,506 per month on average between April and June.
Popov noted that working from home may be the new normal but it’s not necessarily permanent.
“If remote work really takes off in a new kind of accelerated way that will cool off the really hot markets that have grown really hot because of the clustering of jobs,” Popov said. “I bet that would be a huge boost to Boulder, to Colorado Springs, to Fort Collins — places where people can live a little bit further away because they only need to commute work occasionally.”
Only 24% of Denver renters were looking outside the metro between April and early August, virtually the same percentage as last year. Among those people, Boulder, Colorado Springs, Fort Collins and Los Angeles were the most popular markets in descending order. The top markets for renters looking to move into Denver were Colorado Springs, Boulder and New York City, according to Apartment List.
Original content here.