PORTLAND, Ore. – Thanks to the Internet anyone who follows Portland Oregon Property Management like we do knows that the rental market in Portland was one of the busiest markets in the nation due to a high demand for rental properties and tight inventory but how competitive was the rental market when compared to other cities nationwide?
In this post we will breakdown the Portland Oregon rental market so you will know how competitive Portland is when compared to the rest of the United States.
U.S. Vacancy Rate Down To 7 Percent
One of the biggest factors which has contributed to the low vacancy rate across Portland and the entire State of Oregon is that the U.S. Vacancy rate has declined to a shockingly low 7 percent and this means that the rate of available apartments in Oregon is 4 percent less than it was back in 2009.
When you combine fewer available rentals with an increase in people coming to Oregon this has been like a “perfect storm” for renters and Portland Oregon Property Management that’s driven up rents and made it more difficult for people who have been searching for Portland Oregon apartments and rentals across the state.
Just 2.4% of Portland Apartments Are Vacant
Another interesting fact about from the statistics is that as of January 2016 just 2.4% of apartments in Portland were considered to be available while Los Angeles, Austin Texas, San Francisco and Seattle also saw some of the lowest vacancy rates nationwide.
Besides having more people relocating to Portland in the last 12 months, as Portland Oregon Property Management professionals we know that other reasons why rents have gone up so fast in the last year include: lack of building lots for single family homes and multi-family properties, fewer single family homes available for rent and more senior citizens are now renting in Portland instead of buying.
Low inventory and high prices are driving the real estate market in all of Portland, according to Jan Caplener one of the owners of Portland’s Reality Trust.
“Right now, Portland especially, is the hottest you can have. There are way more sellers than buyers,” Caplener said. “Portland businesses are bringing a lot of people from other states. We are out of building lots for larger parcels and multifamily dwellings.”
The rise of the rental and apartment market is contributing to the decline of available homes as well. Arthur Nelson, an associate dean for Architecture and Planning for the University of Arizona, is an expert in real estate analysis. He said Portland has seen an increasing demand for upscale apartments from professionals and senior citizens who prefer renting to buying.
Unsurprisingly, the West also has a tight grip on the statewide vacancy rate. While Vermont has the lowest rate, with just 2.9 percent of rentals in the state currently available, Oregon is not far behind. It ranks second on the list, with a vacancy rate of 3.5. Washington was third on the list, with a vacancy rate of 3.8.
Will Increasing the Supply Help Lower Rents Across Portland?
Over the last 24 months we’ve all seen the news that Oregon (10% increase in migration over the last 6 years) is considered to be one of the top moving destinations in the United States especially by companies like United Van Lines who ranked Portland in particular as one of the top cities that people want to move to in the United States.
Will increasing the supply of available properties in help the housing shortage problem? The answer to this problem is both yes and no.
Yes, increasing the supply of available rental properties would be helpful with slowing down fast increasing rents but the reality is that construction is still about 2 years behind where it should be in Portland Oregon and when you combine that with increased bureaucracy from city officials it’s unlikely that the city will see much progress with increasing the housing supply any time soon.
To increase the overall housing supply, we need to remove barriers to building. This includes updating zoning codes to allow for a wider variety of housing types at a range of price levels. At the same time, we should streamline the process for development review and permitting new construction while retaining standards for high-quality buildings. Under the current process, approvals can take a year or more, adding to project costs and delaying the construction of much-needed market-rate and affordable units.
We also need to expand and simplify incentive programs to encourage developers to build for a variety of incomes. For example, updating Portland’s Multiple-Unit Limited Tax Exemption (MULTE) program to make it simpler to use has resulted in 82 new affordable units in the city in just a few months.
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