Thursday, November 1, 2012

Colorado Springs apartment vacancy rates flat, but rent hits all-time high

The average rent in the Colorado Springs metro area rose year over year for the eleventh quarter in a row during the third quarter of 2012, climbing 1.1 percent to $787. According to a report releasedtoday by the Colorado Division of Housing and the Apartment Association of Southern Colorado, the average rent for the region during the third quarter this year was up from $778 reported during the third quarter of 2011, and was up from 2012’s second-quarter average rent of $776.  (See here for slideshow.)

The median rent rose year over year to $757 during the third quarter, rising 0.6 percent from 2011’s third-quarter median rent of $752.

The average rent increased year over year in all sub-markets measured during the third quarter except the Far Northeast and Security/Widefield/Fountain regions where the average rent fell 6.4 percent and 3.1 percent, respectively.  The average rent increased the most in the Northwest region where it was up 3.8 percent, year over year, to $882.  

“Although the growth rate has fallen off a bit, market rents continue to grow in the region” said Ron Throupe, a professor of real estate at the University of Denver’s Burns School of Real Estate and Construction Management, and the report’s author. “Even more telling, however, is the continued decline in rental losses and rent concessions which indicates that things are looking better for owners.”

Average rents for all market areas were: Northwest, $882; Northeast, $750; Far Northeast, $851, Southeast, $718; Security/Widefield/Fountain, $594; Southwest, $795; Central, $746.

The apartment vacancy rate in the Colorado Springs metro area fell year over year to 6.1 percent during the third quarter of 2012, falling from last year’s third-quarter vacancy rate of 6.2 percent. This year’s third-quarter rate rose from the second-quarter rate of 6.0 percent.

As of the third quarter, the vacancy rate was flat or falling year over year in all areas except the Northwest and Far Northeast regions. The largest decrease in the vacancy rate was found in the Security/Widefield/Fountain area where it dropped year over year from 10.7 percent to 4.7 percent.

“The vacancy rate during the third quarter was near an eleven-year low, but the rental market isn’t as tight as what we’re seeing in metro Denver and northern Colorado,” said Ryan McMaken, a spokesman for the Colorado Division of Housing. “The relatively high unemployment rate in the Springs is likely impacting household formation rates, and that’s leading to a softer market than what we might otherwise see.”

Vacancy rates for all market areas were: Northwest, 5.9 percent; Northeast, 4.4 percent; Far Northeast, 8.2 percent, Southeast, 8.0 percent; Security/Widefield/Fountain, 4.7 percent; Southwest, 4.8 percent; Central, 4.7 percent.