Colorado Springs Real Estate

Springs' cost of living drops to two-year low

By Wayne Heilman, The Gazette Telegraph

Living Costs in Colorado Springs dropped to the lowest point in the past two years, according to a quarterly study by the American Chamber of Commerce Researchers Association.

Local costs were 1.8 percent below the national average as of September 30, the Arlington, VA based group reported Friday.  That is the lowest level for the cost of living since it was 2.7 percent below the national average September 30, 2000.

Much of the decline is because housing costs edged closer to the national average.  Colorado Springs housing costs were 3.5 percent above the national average of September 30, compared with 5.1 percent above the average a year ago.

The cost of groceries, utilities and other goods and services also dropped, while transportation and health costs moved higher.  Local health care costs remain at 13.7 percent above the national average, while utility costs are 19.5 percent below the average.

"The local economy has slowed down so much that housing is not selling as well as it did, especially the higher-end homes," said Fred Crowley, senior economist for the Southern Colorado Economic Forum at University of Colorado at Colorado Springs.

Living costs here were 1.3 percent below the national average as of June 30.  While local costs are dropping in comparison with the national average, that doesn't mean local prices are falling - just that they are rising more slowly than the rest of the nation.

Crowley said the local economy is recovering more slowly than the rest of the nation.  While the U.S. economy is showing some signs of improvement, the Springs economy remains in a recession fueled by 7,500 layoffs since January 2001.

Crowley said lower costs could have a silver lining for the Springs economy.  Local officials used lower costs to help recruit employers in the early 1990's and do so again, he said.

His research shows Springs housing costs are second-lowest among 15 cities with which the Springs often competes for high-tech business.

Crowley expects local costs to continue to edge lower in comparison with the national average until the local economy begins recovering late next year.

"The fact that costs are growing more slowly here that the rest of the nation is good for consumers because it means their purchasing power has increased, even if their salaries have not," Crowley said.

The quarterly survey compares expenses for professional and executive households among 324 metropolitan areas nationwide.

It is designed to help compare living costs when people are transferred or change jobs and move to another city.