The cost to rent a Colorado Springs apartment declined in the fourth quarter of 2021, as nearly 1,000 new units came on the market during the period and possibly helped slow rents from their record-setting pace earlier in the year.
Local rents averaged $1,471.19 a month from October through December, according to a survey of landlords and apartment owners by Ron Throupe, an associate business professor at the University of Denver's Daniels College of Business, and Jennifer Von Stroh of Colorado Economic & Management Associates in Denver.
Fourth quarter rents in the Springs were down by nearly $25 a month from the record high of $1,495.71 in the third quarter of 2021, the report shows. Also, it was the first time since the start of last year that rents had failed to set a quarterly record.
On the one hand, fourth quarter rents typically decline from the third quarter because fewer people tend to look for apartments late in the year, industry experts have said. When demand slows, landlords ease off on rents.
At the same time, 975 apartments were completed in the fourth quarter and added to the overall supply of units available for rent — one of the largest numbers of new units for any quarter on record, according to the University of Denver report.
For all of 2021, the area's inventory swelled by 2,107 apartments — the most for any year in at least a decade and possibly longer, based on historical data included in the report.
As a result, some landlords and apartment owners might have maintained rents or lowered them in areas of Colorado Springs where an influx of new units opened, said Laura Nelson, executive director of the Apartment Association of Southern Colorado.
"If they see large numbers (of apartments) being added in certain areas, obviously they're going to have to become competitive," Nelson said of landlords and apartment owners.
Even with the 2,107 units added last year, the Colorado Springs area still needs more apartments to meet the demand, she said.
And without an increase in the supply of apartments, rents have nowhere to go but up because the demand for multifamily living, in general, is through the roof, Nelson added.
Many young people have shown they want to rent because they don't want to be tied to a long-term mortgage, while empty nesters and area residents who want maintenance-free living like apartments, too, industry experts have said.
"We need more supply, period," Nelson said. "We're still way behind. But this (additional fourth-quarter units) is evidence that it will have an effect (on rents)."
Going forward in 2022, Nelson said it's difficult to predict what might happen to rents.
If developers and builders have difficulty completing apartments because of supply chain issues, and if some projects are delayed, owners and landlords might see inventory tighten again and could raise rents as a result, she said.
Then again, apartment owners and landlords prefer to rent their units in the summer, rather than the fall and winter, Nelson said. If they want to fill up their units before year's end, they might hold off on summer rent increases as an incentive for renters, she said.
"It can go either way," Nelson said.
Visit The Gazette to learn more.
Related Links
5 Most Profitable Home Improvements to Make Before Selling Your House
Colorado Springs plans to outfit streetlights with air quality, traffic tracking sensors
If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
