Colorado Springs apartment rents hit another record high late last year, but the overall multi-family market - while still strong - could be slowing a bit, according to a pair of new reports.
A Colorado Division of Housing survey of Springs-area landlords showed average rents in the fourth quarter of 2016 rose to nearly $1,033 a month - the seventh consecutive quarter in which rents set a record.
Fourth-quarter monthly rents also were up nearly $91 from a year earlier and increased a little more than $7 from the third quarter of 2016.
The Housing Division report also showed:
- Rents averaged $1,130.60 in northwest Colorado Springs, which was the highest for any area. Cheapest average rents of $888.17 a month were found on the southeast side.
- Average rents were nearly $1,360 a month at amenity-filled apartment complexes built since 2010. Not surprisingly, older, pre-1959 properties had the lowest rents of a almost $815.
- The area's fourth quarter vacancy rate of 6.8 percent was up from 5 percent a year earlier and 4 percent in the third quarter. Vacancies typically rise in the fourth quarter because fewer people are moving into apartments at that time of year.
But while the Housing Division's report showed continued growth in rents, a separate report by online research company Apartment Insights showed rents could be moderating.
In the first quarter of this year, rents averaged $947 a month; that's up $62 from a year earlier, but down $7 a month from the fourth quarter of 2016, Apartment Insights said.
The first-quarter vacancy rate of 5.25 percent rose three-quarters of a percentage point on a year-over-year basis and was up 1 percentage point from the fourth quarter of last year, according to Apartment Insights.
A deployment of more than 4,000 Fort Carson troops to Eastern Europe in January might be one factor slowing the market, since many soldiers live in apartments, said Doug Carter, a local commercial broker and Apartment Insights partner.
At the same time, some renters might be leaving apartments and buying homes, he said. Also some apartment dwellers might have simply moved out of the area.
"This is still a very strong, healthy rental market," Carter said. "We've seen some slight changes in rents and vacancies. Nothing big. We'll find out over time if the direction of the rental market is changing or we're just bouncing around with a strong, healthy rental market."
Multi-family experts have said mobile-minded millennials, empty nesters and others have driven the apartment demand in recent years. Laura Nelson, executive director of the Apartment Association of Southern Colorado, which co-sponsors the Housing Division report, said she expects that trend to continue.
"The demand for apartments is not going away anytime soon," she said.