The Portland rental squeeze

The Portland rental squeeze

By Linda Baker

0811_PDXRentalSqueezeLandlords of Portland, rejoice. Although the city’s residential real estate market remains in the doldrums, the rental market is flourishing.

During the first quarter of 2011, apartment vacancy rates were 3.4%, the lowest in the country and a full point lower than last year. And as supply tightens, rental rates are soaring. Portland ranks fourth in the country for growth in apartment rents, according to AXIOMetrics, a Texas firm that tracks the apartment market. Nationwide, rents increased 1.77% in March compared to a year ago. During that same period, Portland recorded a whopping 9.92% increase in rental rates.

A steady stream of new residents and a limited supply of new projects are driving the Portland market, says Bernard Gehret, principal broker for Portland-based Joseph Bernard Investment Real Estate. In 2010, 737 construction permits were issued for Portland area multi-family developments; typically, there are 4,000, Gehret says. “People are leaving home ownership,” he says. “But there are no new buildings.”

Gehret says these market conditions aren’t expected to change any time soon, giving landlords another reason to celebrate. “We’ll probably see rents go up again in 2012,” he says.

Comments   

 
Connie Vitucci
0 #1 More of the same in 2Q2011Connie Vitucci 2011-07-27 14:07:13
The news with regard to Portland's apartment rentals is much the same for the second quarter of 2011, complete with falling vacancy levels and rising rents. According to Reis, Inc., which tracks approximately 105,000 rental units in Portland, the average metro vacancy rate is 3.5%, down 40 basis points from the first quarter and 220 basis points lower than this time last year. The second quarter average asking rent, meanwhile, has risen 0.7% since last quarter, to $849 per unit, reflecting a 3.0% increase since the second quarter of 2010. Although new development activity is expected to be somewhat subdued this year, thousands of rental units are expected to be completed in the coming years, including the delivery of more than 1,200 units in 2012. However, favorable market fundamentals are expected to keep the vacancy rate relatively unchanged amid ever growing rents.

For more apartment, retail, and office property insights in 200 metro areas and 1,800 submarkets/neig hborhoods nationwide, go to ReisReports.com.

Connie Vitucci
ReisReports.com
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Erika
0 #2 Blurg!Erika 2011-08-05 13:39:49
Any increase in rent and I will have to ditch my apartment and pitch a tent in Washington Park.
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