The median rent also rose to a record high increasing to $792.97 in the fist quarter, compared with $780.14 in the fourth quarter. While the market is improving, it is not as robust as the rental figures might indicate. Gordon Von Stroh, a professor at the Daniels College of Business at the University of Denver, and the author of the report, notes that the gross rent numbers do not include the cost of rental discounts and concessions, models, bad debts and delinquencies. Those costs average 15% in the first quarter, down from 15.1% in the first quarter.

The overall vacancy rate decreased to 9.3% from 10.5% in the first quarter of 2004 and 10% in the fourth quarter, which Von Stroh, thought was a better indicator of the market. "That's an unexpected improvement, as the fourth and first quarters are usually more problematic for us." Renters typically are not signing a lot of new leases during that six-month period for seasonal reasons, Von Stroh says.

However, the "economic vacancy," remains high, although it is improving. The economic vacancy--which is the vacancy plus concessions and other write-offs as a percent of gross potential rents--was 24.3% in the first quarter, down from 25.7% a year earlier and 25.1% in the fourth quarter.

"The economic vacancy is still high, but it is moving in the right direction," says Dan Levin, president of Koelbel Property Management, which owns some high-end apartment communities in and around the city. Levin tells GlobeSt.com that at his communities Koelbel is effectively raising rates by cutting concessions.

"I would say the economic vacancy rate ranges from 20% to 30%, depending on the building. But you can look at the data, and definitely say that the glass is half-full, while in the past you would have said the glass is half-empty. The perception is that the glass is half-full, and the reality will follow the perception. This ship is starting to turn."