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Apartment vacancy rates in the Colorado Springs area fell to 5.8 percent during the second quarter of 2010, falling to the lowest vacancy rate reported since 2001. According to a report released today by the Apartment Association of Southern Colorado and the Colorado Department of Local Affairs’ Division of Housing, overall vacancies fell in the Colorado Springs area from a rate of 9.8 percent reported during the second quarter of 2009. The rate fell from 2010’s first quarter rate of 6.9 percent. The Colorado Springs-area vacancy rate has not experienced an increase since the first quarter of 2009.
The first quarter’s rate of 5.8 percent is the lowest vacancy rate recorded since the third quarter or 2001 when vacancies were 5.4 percent. The vacancy rate rose to 8.9 percent during the fourth quarter of 2001, and never fell below 8 percent again until this year.
“Increases in the local troop population have clearly been a factor, but we’re also seeing the impacts of very little new production in multifamily housing in recent years,” said Gordon Von Stroh, the report’s author and a professor of business at The University of Denver. “Not all permits translate into actual completed units, and for buildings with five or more units, only eight permits were issued for units in a single building in 2009. Zero permits have been issued through May of this year.”
Year over year, vacancy rates fell the most in the Southeast market area of Colorado Springs where vacancy rates were more than cut in half from 17.8 percent to 6.7 percent. Vacancy rates were lowest in the Far Northeast and Southwest market areas with vacancy rates of 4.7 percent and 3.7 percent, respectively.
Vacancy rates for all market areas were: Northwest, 6.0 percent; Northeast, 5.8 percent; Far Northeast, 4.7 percent, Southeast, 6.7 percent; Security/Widefield/Fountain, 11.7 percent; Southwest, 3.7 percent; Central, 7.7 percent.
In spite of significant drops in vacancy rates, the metro area’s overall average rent increased only slightly year over year. This year’s second quarter average rent rose to $719.22 from 2009’s second-quarter rent of $717.65. In individual market areas, from the second quarter of last year to the same period this year, average rents fell in the Northeast, Far Northeast and Security/Widefield/Fountain areas. During the same period, average rents rose in the Northwest, Southeast, Southwest and Central market areas.
“Average rents have increased in the area, but a lack of job growth across the region will keep some downward pressure on rents,” said Ryan McMaken, a spokesman for the Colorado Division of Housing. “This rent data is from June, and June employment data shows that year-over-year employment in El Paso County fell by about seven thousand. It’s tough for apartment owners to raise rents in such an environment.”
Average rents for all market areas were: Northwest, $765.40; Northeast, $703.97; Far Northeast, $840.25, Southeast, $613.56; Security/Widefield/Fountain, $615.66; Southwest, $733.66; Central, $659.79.
Apartment Realty Advisors is also a major sponsor of this report. The Vacancy and Rent Surveys are a service provided by the Colorado Department of Local Affairs’ Colorado Division of Housing and the Apartment Association of Southern Colorado to renters and the multi-family housing industry on a quarterly basis. The Colorado Springs Area Vacancy and Rent Survey reports averages and, as a result, there are often differences in rental and vacancy rates by size, location, age of building, and apartment type. For more information, please contact the Apartment Association of Southern Colorado at http://www.aacshq.org ; or please visit the Colorado Division of Housing web site: http://dola.colorado.gov/cdh/