Q4 2024 Boulder Multifamily Market Report
Market Overview
The Boulder multifamily market continues to show resilience despite recent challenges, with demand remaining strong in suburban areas. However, rent growth has slowed due to seasonal trends and an active construction pipeline. Apartment rents in Boulder fell for the fifth consecutive month in Q4 2024 as landlords responded to competitive pressures and seasonal declines in leasing activity. Despite the slowdown in rent growth, Boulder remains one of Colorado’s most sought-after markets, driven by the area’s high quality of life, robust economy, and proximity to top employers in high-tech and research sectors.
Vacancy & Absorption Trends
The Boulder market’s vacancy rate rose to 9.3% at the end of Q4 2024, reflecting an increase in new construction and the seasonal slowdown in leasing. Despite this rise, demand has remained strong, with 144 units absorbed during the quarter. Suburban areas like Gunbarrel and North Boulder have shown more stability, while the downtown core has faced more competitive pressure due to an influx of new units.
- Downtown Boulder: The urban core saw higher vacancy rates near 10.3%, driven by an influx of new units in recent quarters.
- Suburban Areas: Gunbarrel and North Boulder saw relatively low vacancy rates around 7.7%, while Longmont’s rate stood at 8.9%. In contrast, Louisville and Lafayette experienced higher vacancy rates, with 13.2% and 17.3%, respectively.
Key Market Indicators
Vacancy Rate
9.3% at the end of Q4 2024
Up from 7.9% in Q3 2024
Absorption
144 units absorbed in Q4 2024, showing continued demand despite rising vacancy.
Compared to 289 units in Q3 2024.
Rent Growth
Average effective rent reached $1,910 per unit.
1.4% decrease from $1,938 in Q3 2024.
Construction
636 units delivered in Q4 2024.
Significant increase from just 12 units in Q3 2024.
Investment Volume
Reached nearly $121 million in multifamily transactions in Q4 2024.
Apartment Rents Fall for Fifth Consecutive Month
Apartment rents in Boulder fell for the fifth consecutive month, continuing the seasonal trend observed in previous years. From July through November 2024, rents dropped by 4.2%, largely driven by a slowdown in leasing as students and families with children moved out before the start of the school year. This seasonal decline has been particularly pronounced due to the ongoing construction boom, with approximately 1,150 units completed in 2023 and another 1,450 units delivered in 2024.
Despite the recent pullback, Boulder’s rents are still up 1% year-to-date, exceeding the 0.5% decrease seen over the same period in 2023. The spring leasing season was particularly strong, helping to offset some of the later-year rent declines. Looking ahead, Boulder’s construction boom is expected to wind down, with just 500 units projected to be delivered in 2025. As a result, rent growth could rebound to the 3% to 4% range in the coming years, assuming demand remains healthy.
Construction Activity
Boulder’s construction activity remained strong, with 636 units delivered in Q4 2024, a significant jump from just 12 units completed in Q3 2024. However, with fewer new units expected to be delivered in the next few years, the market is anticipated to stabilize, creating more favorable conditions for landlords. New completions are forecasted to slow to 260 units in 2025.
- Units Delivered (Q4 2024): 636 units up from 12 units in Q3 2024
- Projected Completions in 2025: New completions are expected to slow to just 260 units.
Thompson Thrift Development in Longmont
Thompson Thrift, a national real estate investment and development firm, is set to contribute to Boulder’s multifamily landscape with the development of Heritage on Hover in Longmont, a suburban area just outside Boulder. The project will feature 324 Class A units across multiple three-story buildings, and it is expected to be completed by winter 2026. This development is part of a larger $230 million investment initiative by Thompson Thrift, which is also pursuing other national projects in 2025. With Boulder’s proximity to tech employers and its highly educated workforce, Longmont is becoming a highly desirable location for residential development.
Rent Growth & Concessions
Although rent growth in Boulder has slowed, the overall market remains resilient, with average rents decreasing by 1.4% in Q4 2024 to $1,910 per unit. The seasonal slowdown in rents is typical for the second half of the year, driven by a combination of factors, including the return of students and families to schools. Rent losses are expected to continue through early 2025, but as the construction pipeline slows, rents are forecasted to rebound as demand remains strong.
- Average Market Rent (Q4 2024): $1,910 per unit, a 1.4% decrease from Q3 2024.
- Rent Forecasts: CoStar Group forecasts a 3% to 4% increase in rents in the coming years, driven by a constrained construction pipeline and continued demand.
Investment Activity
Investment activity in the Boulder multifamily market remained active in Q4 2024, with $119 million in multifamily transactions. Investors have been drawn to the region’s strong fundamentals, particularly in suburban areas like Lafayette and especially in Longmont, where major transactions have been occurring. While the downtown core has faced higher competition due to new developments, Boulder’s overall market remains appealing for long-term investment.
- Q4 2024 Investment Volume: $121 million, highlighting ongoing investor confidence.
- Investment Focus: Suburban areas, particularly Longmont and Lafayette, have seen increased investor interest due to favorable conditions and lower competition.
Market Forecast
The Boulder multifamily market is expected to stabilize in 2025 as construction activity slows, leading to more balanced supply and demand. With fewer new units hitting the market, rents are projected to rebound, with growth in the 3% to 4% range in the coming years. The local economy’s strength and the continued appeal of the area’s lifestyle make it a prime location for both residents and investors.
- Vacancy Rate Forecast: Expected to stabilize as construction activity slows, leading to more balanced supply and demand remains steady.
- Rent Growth Forecast: CoStar Group forecasts a 3% to 4% increase in rents in 2025, supported by limited new supply and strong demand.
- Investment Outlook: Boulder will continue to attract investment, particularly in suburban markets, as new development slows and demand remains strong.
