Springs cost of living 8% below national average

Falling prices for high-end homes helped keep local living costs from rising as fast as the rest of the nation's during the first quarter, according to a quarterly survey.

Living costs in Colorado Springs were 8 percent below the national average during the January-to-March quarter, nearly the widest such gap in 20 years, according to a survey by the Council for Community and Economic Research. Local costs were 6.8 percent below the national average during the first quarter of 2010 and averaged 7.2 percent below the average for all of 2010.

The council’s cost-of-living index doesn’t measure inflation, but instead compares prices for 57 goods and services bought by households headed by middle managers. It’s designed to compare living costs for people moving to another city and covers 312 metropolitan areas nationwide.

The decline in comparison with the national average came despite rising fuel prices — the index component measuring transportation costs was 1.6 percent below the national average during the first quarter, compared with 3.8 percent below the average for all of last year and 5.9 percent below the average a year earlier.

The component measuring housing costs, meanwhile, which accounts for 29.3 percent of the overall index, was 11.1 percent below the national average during the first quarter, compared with 8.2 percent below the average for all of last year and 6.7 percent below the average a year ago. The housing component dropped mostly because the estimated cost during the first quarter of a four-bedroom house in the Springs fell 6.8 percent from a year earlier to $248,601, while the median price nationally fell 2.9 percent during the same period.

“The housing component is a bit misleading because, for most people, the cost of housing remains unchanged. They still have the same mortgage payment. It only affects someone buying a home,” said Fred Crowley, senior economist for the Southern Colorado Economic Forum. “Local housing costs are a comparative advantage for employers who are trying to recruit people. It can be an effective tool.”

Components of the local index measuring grocery prices and miscellaneous goods and services moved farther below the national average compared with a year ago. The component measuring local utility costs moved closer to the national average during the same period, but still remained 11.9 percent below that average. The component measuring local health care costs moved farther above the national average and remains the only component where costs are higher than the national average.

Among other cities in the state, living costs in Denver were 6.4 percent above the national average, while costs in Grand Junction were 1.1 percent above the average and costs in Pueblo were 15.8 percent below.
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