Report by Daniels College of Business real estate professor
The fourth quarter Colorado Springs apartment vacancy and rent report shows a typical seasonal rent decrease along with a vacancy increase. This is a common theme for fourth quarter results. The report is conducted by the University of Denver’s Daniels College of Business and Colorado Economic and Management Associates and sponsored by the Colorado Department of Housing.
“The overall average rent decreased $27.65, from $1,231.24 to $1,203.59 from the third quarter results,” says report author Ron Throupe, associate professor of real estate at the Daniels College of Business. “This rent pullback was not uniform as several sub markets experienced significantly greater rent price adjustments than the average change.”
The year over year average rent change from the 2018 fourth quarter, $1,149.94, results in a yearly increase of $53.65. The median rent change was less dramatic for the quarter. The fourth quarter median rent was $1,208.88 compared to a third quarter median rent of $1,217.93. The data shows a quarterly increase in vacancy to 5.8% from 5.0%, with a 0.2% decrease from 6.0% year over year.
The Colorado Springs Metro apartment market continues to show demand with 104 units absorbed this quarter and 1,121 units for 2019. The total of new units added for this quarter is 498 and the total for all of 2019 stands at 1,245 units. The vacancy down for the year demonstrates that net unit absorption has kept pace with new unit construction. There were a significant number of new units added this quarter, affecting the overall vacancy.
“Fourth quarter was steady for many properties,” says Laura Nelson, executive director of the Apartment Association of Southern Colorado. “Older properties, which tend to be more affordable, had some of the highest vacancies. Some of the properties where actually offering concessions for the first time in years.”
“The Colorado Springs apartment market rent change was greater than expected but in line with seasonal and other Colorado market expectations,” Throupe says. “We will continue to watch how consumer sentiment and economic conditions change for the region and national markets.”