The report says the current boom in apartment construction activity has followed several years of developmental restraint and a wariness of repeating the overbuilding mistakes of the 1980s.

''The slowing of the local economy has resulted in very low absorption for the first three quarters of 2001," according to the report. "The jump in vacancy rates and emergence of rent concessions are evidence that at least some submarkets are overbuilt.''

Construction delays led to slightly less than 7,400 units being completed last year, according to the report.

''Developers, lenders and equity partners are showing restraint, however, it comes a bit late as there is already excess supply under construction in the six county Denver metropolitan apartment market,'' Genesis says.

The sluggish market may lead an increasing number of condo conversions, as owners get tired of filling rental units in a slowing market, the report adds.

Developers also will increasingly try to build lower-priced units, reversing the trend of building almost exclusively upper-end product during the past decade.

''As a result, old standing apartment projects will lower their rents to remain competitive in this new over-supplied market,'' Genesis predicts.'' This in turn will drive up demand to a level of equilibrium closer to what we saw throughout the 1990s. However, it is also likely that we will see a bit of a shift away from constructing apartment projects in light of our softening economy and abundant apartment housing market. This would decrease the amount of rental units supplied to the market and justify a higher monthly rent.''