Apartment rents and vacancies usually move opposite of each other, but they both fell in the third quarter, according to the latest Denver Metro Apartment Vacancy and Rent survey out on Tuesday.

The average apartment rent in metro Denver dropped from $1,484.02 in the second quarter to $1,464.90 in the third, a decline of 1.3 percent or $19 a month. Over the past year, average rents are up 3.4 percent.

Typically, average rents rise in the third quarter as high school and college graduates and summer newlyweds look for a place to live. But for the third year in a row, they have fallen.

You’d have to go back to when Ronald Reagan was president and the average apartment rent in Denver was $396 a month to find a streak that long, said Teo Nicolais, a Harvard Extension School instructor who specializes in real estate.

Also unusual — rents softened even as the supply of available apartments tightened. The vacancy rate dropped from 6 percent in the second quarter to 5.5 percent in the third. Normally, a falling vacancy rate means upward pressure on rents as the market tightens.

Ron Throupe, associate professor of real estate and construction management at the University of Denver’s Daniels College of Business, argues that new apartments are now being added at a faster pace than new households are forming.

Projections call for 30,000 apartments over the next 30 months and about 22,200 households a year forming in the metro area. Assuming 40 percent of those households choose to live in an apartment, that would mean the market is building 2,600 more units a year than needed, Throupe said.

He expects the apartment vacancy rate to rise above 7 percent.

“That rate is not a travesty. It is still considered a solid market, and the unit slack could be absorbed in the following years,” he said in a release.

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But Nicolais notes that developers are on track to deliver fewer units this year than last, when 13,348 apartments came onto the market. Through the first three quarters, they have delivered 8,448 units in metro Denver.

Despite warnings the past few years of an apartment glut, developers kept building and young adults kept moving here and renting those units, Nicolais said. The trend he sees now is toward a “normal, balanced” market.

“Supply is finally catching up with demand. It has been a long time in coming,” he said.

The highest average rents are in downtown Denver at $1,958 a month, followed by Boulder’s university area at $1,791 a month, according to the survey, which is published by the Apartment Association of Metro Denver.

The lowest rents in the area are Wheat Ridge at $1,100 a month, Aurora Central northwest, near I-225 and Alameda, at $1,236, and Denver’s far southeast corner at $1,302 a month.

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