By Property Management Systems
Thanks to recent rental market data from Zillow we know that the Pacific Northwest (Portland and Seattle) continue to lead the nation in rent growth.
Pacific Northwest Continues to Lead Rent Growth
As of July 2017, Portland Oregon has seen 3.5% rent growth while Seattle has seen 5.4% rent growth.
In the Pacific Northwest, rent growth is expected to continue thanks to the fact that both cities have strong jobs markets that are overwhelming supply and many people who move to either city do so for jobs in the tech sector and are able to afford higher rents.
Across the Nation, rent growth has slowed dramatically this year thanks to a huge influx of new deliveries of apartments in cities like San Francisco and New York.
Rents in both cities are down 1% in the last year but are still high but it’s gradually been declining and more landlords are offering incentives like one-month free rent and other concessions to lure renters to their buildings.
There’s certainly no denying that the demand for Portland Oregon homes for sale is huge right now and the same goes for the rental market over the last two years.
In July 2017, the average rent in Portland Oregon is $1,667 per month, if you plan on renting a two-bedroom apartment in the city you can expect to pay $1,903 per month while a one bedroom will cost you about $1,543 per month.
The average apartment rent over the prior 6 months in Portland has increased by $81 (5.1%)
One-bedroom units have increased by $80 (5.5%) and two-bedroom apartments have increased by $147 (8.4%)
National Rents Current: $1,422
Monthly Change: 0.4%
Annual Change: 1.1%
Portland Metro Rents
Monthly Change: 1.3%
Annual Change: 8.1%
Building Is Still Way Behind Where It Should Be
One important trend to note is that building is still way behind where it should be and hasn’t caught up caught up yet.
This is partially one of the primary reasons why home prices in cities like Portland Oregon have appreciated so dramatically since 2015, 4% to 7% nationally and is getting close to where they were during the pre-bubble years.
Best Rental Markets Ranked
Arizona metro areas occupied six of the top 10 spots on the best rental markets list: Scottsdale (number one), Peoria (number two), Gilbert (number three), Chandler (number four), Tempe (number seven) and Glendale (number 10).
At the far end of the spectrum, Cleveland ranked last among the 150 markets analyzed by WalletHub, which number-crunched 21 indicators on rental attractiveness and quality of life.
Among the key criteria judged for the analysis, Hialeah, Fla., had the highest rental affordability rate, 41.52 percent, which is 2.5 times above the 16.44 percent level found in Plano, Texas.
Little Rock, Ark., had the highest rental vacancy rate, 17 percent, which is 8.1 times higher than the 2.1 percent rate found in both Madison, Wis., and Garden Grove, Calif. Newark, N.J., had the highest share of renter-occupied housing units, 78.3 percent, which is 3.4 times higher than the 22.7 percent rate in Port St. Lucie, Fla. and Laredo, Texas, had the lowest cost-of-living index, 77, which is 2.6 times below than in New York, the city with the highest at 201.
More Building Regulations Are Keeping Rents High but Development Low
Recent data from Zillow shows us that cities like Portland and Seattle that have stringent building codes and regulations are seeing higher rent growth because a lack of rentals is keeping demand high while other cities like Houston Texas are seeing a decline in their rent growth due to more inventory that they’ve released to the rental market in the last year.
More People Are Moving to Affordable Areas
In Portland and across the United States one important trend that’s been observed is that more people are moving to cities just outside of expensive urban areas.
This can be seen in Portland where since 2015 many people have moved outside of the city center to nearby towns like Beaverton but the good news for property owners here is that rents continue to increase because Portland has continued to remain one of the most popular relocation destinations in the United States.
Household Formation Is Slowing
Although it picked up after the end of the “great recession”, household formation is slowing once again. This means that fewer people are living on their own in other cities across the United States and are choosing to stay with their parents or live with roommates rather than living on their own.
Could this be an indicator of what’s really happening with the economy? It’s anyone’s guess. But in Portland, we can expect to see continued rent growth for at last another year or more making the City of Roses one of the top cities in the United States for property owners who are looking to invest in rental properties.
Get Property Management Here
Are you planning on investing in Portland Oregon rental properties? Work with the best team of property managers in the area by contacting Property Management Systems today by calling us at (503) 515-3170 or click here to connect with us online.