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In this March 13, 2015 photo, workers weld body panels on the new aluminum-alloy body Ford F-150 truck at the company's Kansas City Assembly Plant in Claycomo, Mo. (AP Photo/Charlie Riedel)

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Looking for a low-cost apartment? Good luck.

Finding an apartment in the Colorado Springs area remains a challenge, and those that are vacant will continue to cost a pretty penny, a new report shows.

Rents averaged nearly $879 a month from January through March, the second-highest figure on record and an increase of almost $57 a month - or nearly 7 percent - from the same period last year, according to the report by the Colorado Division of Housing and the Apartment Association of Southern Colorado. Apartment rents now have increased for 21 straight quarters on a year-over-year basis.

The area's apartment vacancy rate, meanwhile, was 6.2 percent in the first quarter. That's almost a full percentage point higher than the 5.3 percent rate at the end of last year, but a decline from 6.7 percent during the first quarter of 2014, the report showed.

The local apartment vacancy rate generally has hovered in the 5 percent to 7 percent range for the last five years after having risen to double-digit levels during much of the recession and a decade ago, when thousands of Fort Carson troops were deployed overseas.

But several factors have combined to increase demand and, in turn, drive up rents.

Generally, millennials who don't want to be tied down to homes and mortgages are driving much of the demand, experts have said.

Empty nesters who have downsized or who want maintenance-free living also have contributed to lower vacancy rates.

And even though several apartment projects have been built in recent years in the Colorado Springs area, they haven't been enough to meet the demand. In 2014, just 716 units were added to the supply of apartments in the Springs, while only 568 were added in 2013.

Don't expect trends in the multi-family market to change anytime soon, said Laura Nelson, executive director of the Apartment Association of Southern Colorado. Rents, she said, likely will continue to increase as demand remains steady.

"They're definitely not going to drop," Nelson said.

While the Springs' apartment market is hot, Denver's is scalding, she said. Some renters who feel they're being priced out of Denver might be turning to the Springs as a place to live. In March, Denver-area rents averaged $1,265 a month, according to report this week by a Dallas company that tracks apartment trends.

"Renters who can't afford to rent in Denver, we might be getting some of the overflow," Nelson said.

There may be more apartments coming, however.Apartment developers and investors are turning to the Springs because the cost to build and buy in Denver is so expensive, she said.

Developers have added 442 units to the supply of Springs-area apartments so far in 2015 - already more than half of last year's total.

"I think the demand (for apartments) is going to continue to be there, if not increase, which is why they're building," Nelson said.

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Contact Rich Laden:

636-0228

Twitter: @richladen

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Business writer, Colorado Springs Gazette