Maybe you’ve heard the numbers tossed about in cocktail conversation. Possibly you read the headlines on your smartphone or caught a blurb on the evening news. More likely, you’ve experienced the trend bumper-to-bumper on I-25 during the all-day-everyday rush hour, on I-70 on any given Sunday, or as you’ve traveled north towards what was once the edge of Denver but now continues nearly uninterrupted to Fort Collins. Denver’s population is growing, and quick.
Between 2014 and 2015, Denver accounted for more than half of the state’s population growth (see video below) as Colorado became the second fastest growing state in the U.S. The latest projections from the State Demography Office has Denver’s population increasing by 50,000 each year for the next 15 years. While the organic growth rate for the metro-area will remain steady at approximately 25,000 per year, the interesting variable comes from net migration or those electing to move to Denver from elsewhere.
Local economist Patty Silverstein and the Census Bureau expect the Denver population will continue to grow around 50,000 people per year. Question: Where are they going to live?
While this growth will certainly tax the city’s infrastructure, the impact it will have on the continued housing shortage will be profound. Anybody even remotely involved in real estate in Denver understands how incredibly tight housing inventory is today. The dual force of our population growth paired with the country’s largest millennial segment (which will eventually consume housing), will present a long-term demand for housing that outstrips supply.
Local economist Patty Silverstein estimates 16,000 units were permitted in 2014 and 18,000 units in 2015. However, 31,000 new units per year (10,000 rental units and 21,000 for sale units) are required to keep pace with the 50,000 new residents per year.
Approved building permits across seven metro counties (Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, and Jefferson Counties).
Why This Matters:
- Demand for rental housing should remain strong through the foreseeable future.
- Inventory will likely remain at record low levels.
- Average rents should continue to increase YoY.