Apartment dwellers dug deeper into their pocketbooks during the second quarter as Colorado Springs-area rents hit another record high, a new report shows.
Monthly rents averaged $1,156.76 during the April-June period, about $15 more than the previous record set during the same quarter last year, according to a report from the Colorado Division of Housing and the Apartment Association of Southern Colorado.
Some of the newest apartments that were opened during the first quarter and being filled in the second quarter were higher-end, amenity-filled units that carry higher rents — likely helping to push up the overall rental costs, said Laura Nelson, the Apartment Association’s executive director.
“When you get some more of those luxury units coming on line, you do see that bit of a spike,” she said.
Overall, rents continue to rise because demand remains strong and the supply of apartments is growing slowly, Nelson said. Apartment industry experts have said that millennials who don’t want to be tied down with a mortgage, and empty-nesters looking to downsize, are helping to drive demand. At the same time, some renters who’d like to buy a house can’t afford one nor qualify for a mortgage.
The area’s apartment vacancy rate of 6.3 percent in the second quarter was unchanged from the first quarter and nearly identical to that of a year ago, the report showed. With a total of 49,494 apartments in the Springs area, the 6.3 percent rate translated to just 3,139 vacant units in the second quarter.
“When you take 6.3 (percent) of 49,000 units, that’s not a whole lot for a city our size,” Nelson said.
The number of units added by builders and developers in the second quarter totaled just 222. During the first half of this year, 234 apartments have been added; a year ago during the same period, the number of new units totaled 770.
“We need thousands more,” Nelson said. “It is a complete supply and demand issue. I know people don’t like to see the high-end ones come on line, but really, they still add to the supply. Those folks who can afford them will move up and that will open up a unit that maybe is more affordable for someone else.”
More units are on the way. Among projects in the works:
• Colorado Springs real estate companies Nor’wood Development Group and Griffis/Blessing Inc. have partnered on a pair of downtown apartment buildings that will add about 350 units. One of the projects, at Colorado and Wahsatch avenues, is set to open this summer; the other, at Cascade Avenue and Rio Grande Street, is under construction.
• Etkin Real Estate Partners of Denver broke ground in May on a 288-unit complex southeast of Interstate 25 and InterQuest Parkway.
• Darsey Nicklasson of DHN Planning & Development, who co-developed the Blue Dot Place apartments on South Nevada Avenue, plans a 27-unit project on the west side of Tejon Street downtown, between Costilla and Cimarron streets.
• And Weidner Apartment Homes of suburban Seattle announced plans this week to build nearly 200 units downtown just south of a new outdoor stadium for the Colorado Springs Switchbacks soccer team.