Thursday, November 7, 2013

Slideshow: Colorado Springs Vacancies Down, Rents Up

As reported on Wednesday, the Colorado Springs vacancy rate during the third quarter remained tied at a 12-year low, and the average rent rose to a new all-time high for the second quarter in a row.

The first graph shows the vacancy rate for the Colorado Springs metro area since 1995.  The vacancy rate during the third quarter, at 5.4 percent, was tied with the second quarter at the lowest rate recorded since 2001.


 The second graph shows the vacancy rate for each of the regions of the metro area. The vacancy in the Security/Widefield/Fountain has headed back up in recent quarters, but all other quarters continue to head cluster around 5 percent vacancy.

The third graph shows the average rent for the Colorado Springs area. If we just eyeball it, we can see that the two biggest growth periods were the late 1990s and the period since 2009. The average rent during the third quarter hit the second all-time high in a row, reaching $830.
The same historical pattern holds for rent per square foot, not surprisingly. During the third quarter, the rent per square foot in Colorado Springs hit 1.01, which was the first time it exceeded $1.00. The rent per square foot was up 5.2 percent year over year form the third quarter of 2012 to the third quarter of 2013. 

The rent per square foot was up 5.2 percent year over year form the third quarter of 2012 to the third quarter of 2013, and we're now in a period of significant and sustained growth. 
 The average rent (not per square foot) was up 5.4 percent in the same year-over-year comparison. This was one of the largest year-over-year gains in recent years and rivals that which was seen during the end of the dot-com boom. The graph shows that the average rent has not gone down, year over, year since 2010.

The next graph shows the average rent for all the regions of the Colorado Springs. Notice how the average rent in the central region (the brown line) has accelerated upward since 2009. Solid demand for the area combined with limited supply have propelled rents upward. From the third quarter of 2009 to the third quarter of 2013, the average rent in the central region has increased from $513 to $837.

This next graph shows the average rent adjusted for inflation and compared to the inflation-adjusted average rent in metro Denver. Note that in both cases, rents were way up at the end of the dot-com boom and then fell in real terms for several years until heading back up in 2009. Metro Denver has more or less returned to peak levels, while Colorado Springs remains below its previous peak in real terms. 

The final graph shows that economic vacancy and rental losses due to concessions and delinquencies have fallen to decade-long lows, showing that effective rents are going up, and that the growth in average rent is not simply an artifact of promotional efforts. 

See the report for more detailed information.