We’ve seen some truly remarkable changes in housing rent schedules in the Portland Oregon Rental Market of 2016. There is currently an inventory deficit which includes apartments and detached housing. Rents are hyperlocal; you might pay an average of $1.10 per square foot in most parts of the city, but if you are in highly desirable areas like the Pearl, First Edition Lake Oswego or parts of NE Portland, you will pay $2.00 or more per square foot. An apartment with 2 beds and 1 bath in 2014 would cost about $850.00 per month to rent, whereas in 2016 you’d pay $1200.00 for the same apartment. There are approximately 6,000 apartment permits issued in 2016 that may become available in early 2017, but this is far less than the demand. Before the recession, the demand for detached homes in new construction was 1,500,000 units per year. Now we are seeing less than $600,000.00 nationwide in new permits. Thus, we will be seeing inventory depletion for many years to come.
Historically, the percentage of detached homes compared to rentals is about 63% to 37%. During the recession a lot of homeowners could not sell and were under water. They leased their homes and now those homes are slowly coming back on the market for sale and decreasing the amount of leased inventory. Tenants with families that had foreclosures and short sales can now be ready to be qualified to buy a home. They just needed 3 to 5 years to resurrect their credit and get pre-approved.
Oregon has a strong employment rate and a large migration rate. This will help increase rents and housing prices, so if you are thinking of getting into the market, don’t wait! Call us for a buyer or seller consultation to discuss timing, positioning, forecasting and strategies.
Written by Linda Quinn, Principal Broker