The city’s overall vacancies were down from first and fourth quarters 2009, according to a report released today by the Apartment Association of Southern Colorado and the Colorado Department of Local Affairs’ Division of Housing.
On a year-over-year basis, vacancies fell almost 42 percent to a rate of 11.7, due in large part to returning Fort Carson troops.
The first quarter’s rate of 6.9 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 remained above eight percent for the following eight years.
“Increases in the local troop population have now clearly had an impact in Colorado Springs,” said Denver University business professor, Gordon Von Stroh, who noted there has been little recent new construction of multifamily units in the area. “The market will likely remain tight for a while.”
Geographically for the year apartment vacancies fell significantly in the northwest and the far northeast market areas of Colorado Springs where vacancy rates were more than cut in half to 5.1 percent and 4.5 percent respectively.
In the “Security/Widefield/Fountain” market area, where vacancy rates have often risen above 20 percent in recent years, vacancies fell to 14.2 percent, a four-and-a-half year low. All market areas reported lower vacancy rates for the first quarter of 2010 as compared to the same time last year.
In response to falling vacancies, average rents have increased, but at a moderate pace.
Average rent for the first quarter of 2010 was $710.07, a slight drop from 2009’s fourth quarter average rent of 711.66. They remain below the most recent high of $717.65 reported during the second quarter of last year. Nevertheless, the first quarter’s average rent is the highest first quarter rent level ever recorded, Stroh said.
Colorado Division of Housing spokesman Ryan McMaken said rents will likely continue to remain steady as few new jobs have been added in El Paso County.
“March employment data shows that the unemployment rate in the region was unchanged since February, so rent increases are likely being tempered by limited wage growth,” he said.
Highest average rents were recorded in the far northeast region where several new apartment communities were built since 2000. They showed an average rent of $811.14. As has been the case in the past, the area with the lowest average rent was the southeast region with an average rent of $598.86.