Soaring home prices helped push Colorado Springs' cost of living to a record level above the national average for a second consecutive quarter, according to a new survey.
The local cost of living index in the second quarter was a record 107.8% of the national average, up a full percentage point from the previous quarter, according to the Council for Community and Economic Research.
The council's cost of living index for Colorado Springs has been above the national average every quarter since the second quarter of 2019.
No comparison can be made with the second quarter of 2020 because widespread stay-at-home orders during the COVID-19 pandemic prevented the survey from being conducted.
"Prices are going up the fastest for shelter and goods, and people have to have both," said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum.
"I believe inflation is not just a short-term concern because there are not enough workers, regardless of the extra unemployment compensation, and there are supply bottlenecks that are pushing materials prices higher."
Not only is Colorado Springs becoming a more expensive place to live, its cost advantage over Denver is decreasing.
The council's cost of living index for Denver moved lower in the second quarter to 112.6% of the national average, or just 4.8 percentage points more than the index for Colorado Springs. The gap between the cost of living in Colorado Springs and Denver averaged 10 percentage points in 2019 and 2020.
Dirk Draper, CEO of the Colorado Springs Chamber & EDC, said Colorado Springs rarely competes with Denver for potential employers and the Springs remains a lower-cost alternative to most major metro areas, especially those on the East and West coasts.
The big culprit locally again was housing prices, with the index component measuring housing costs climbing to 117.5% of the national average after hitting 113.2% three months earlier.
Housing costs make up nearly 28% of the overall index, so a sizable change in that category pushes the overall number higher.
Index components measuring grocery and utility costs also moved higher compared with the national average, while transportation, health care and miscellaneous goods and services all drifted lower. All components but health care were above the national average during the second quarter.
The average price of a new four-bedroom, two-bathroom house in Colorado Springs rose 5.1% from the first quarter to $438,742, or nearly twice as fast as the national average.
The National Association of Realtors in August said local home prices jumped 24.3% from a year earlier to $439,200 during the second quarter, making Colorado Springs the nation's 28th most-expensive housing market of the 183 metro areas the trade group tracks.
In the Denver area, costs for housing and transportation both moved higher when compared with the national average, while costs for groceries, utilities, health care, and miscellaneous goods and services moved lower.
On the low end, Denver's utility costs are just 83.1% of the national average and its grocery costs at 94.8% of the average. On the high end, its housing costs are 137.6% of the national average.
The index isn't designed to be used as a measure of inflation over time; it instead is intended to be used by "moderately affluent" households to compare the cost of living when moving to another city.
The index compares prices for 57 goods and services used or purchased where managers and professionals live in 258 metro areas; thus it includes more upscale apartments and single-family homes than the average resident would rent or purchase. The index also includes a different number of cities each quarter and has changed criteria several times, making comparisons over time difficult.
Elsewhere in Colorado, the cost of living in Pueblo moved lower in comparison to the national average at 93.4%. New York had the nation's highest cost of living at 241% of the national average, followed by San Francisco and Honolulu. Kalamazoo, Mich., had the lowest at 77.1% of the average.