PORTLAND, Ore. – There’s no denying that the Portland Oregon Apartments market has always been changing especially when you consider the changes in the economy that we’ve seen in recent years that have motivated many people to choose to continue renting versus buying a home. The big question is what changes can we expect in the apartment market within the next 15 years?
In this article, we will break down some of the changes we can expect in the apartment market within the next 15 years so you can prepare for those changes especially if you plan on investing in apartments here in Portland Oregon.
Millennials Will Continue To Be Prime Renters
Over the next 15 years we can expect to see Millennials continue to be the prime renters in the Portland Oregon Apartments market since this generation encompasses anyone born between 1980 and the year 2000 so technically the youngest millennial will only be 20 years old by 2020 while the oldest Millennials will be in their 40’s and 50’s.
Unlike Generation X and the Baby Boomer Generation that have favored home ownership over renting more Millennials have chosen to continue renting. What’s shocking is that this generation’s preferences are also vastly different than the previous generations especially when it comes to the following items:
Marriage – Right now only 28% of millennials who are between the ages of 18 and 33 years old are married compared to 38% of individuals from Generation X when they were the same age.
Cars – As of 2014 just, 76.7% of millennials (age 20-24) had drivers licenses compared to 83% of individuals aged 20-24 in the year 2008.
Home Ownership – Something that we already knew is that more Millennials over the last 5 years have chosen to continue renting as they grew older instead of buying. To be specific, just 35% of people who are age 34 or younger currently own a home, while 41% of people within the same age group back in the year 2000 could be classified as homeowners.
Multi-Family Space Expected To Benefit Portland Oregon Apartments
Now that we know most Millennials are expected to continue renting Portland Oregon Apartments and multi-family properties over the next 15 to 20 years, the multi-family space is only going to continue benefiting because, as home ownership goes down, the demand for multi-family rental properties will only go up but will apartment construction in Portland and across the United States be able to keep up with demand?
The answer to this question as of right now seems to be yes, housing starts were up by 2.1% during the month of July and the improvement in housing starts was seemingly driven by the demand for multi-family housing.
The pace of new construction has increased only very slowly since the recession ended. Overall housing starts are 5.6% higher compared to a year ago, and July’s figure was the second-best of the recovery, but it’s still much lower than levels notched even before the housing bubble began to swell.
Trulia Chief Economist Ralph McLaughlin wrote in a research note Tuesday that the 12-month rolling average for starts was 80% of its 50-year average in July. “The wave of single-family starts this year still isn’t showing signs of rising the tide for construction jobs,” McLaughlin noted. “The number of construction jobs per housing starts hit a 10-year low in July, likely due to persistent labor shortages.”
When you consider that more Millennials are choosing to rent in the city, versus renting in the suburbs, and since most Millennials may not own vehicles, this will create even more space for apartment construction in cities like Portland, San Francisco and New York where space is already at a premium.
Besides creating more space for building apartments, eliminating or repurposing the estimated 40,000+ parking garages across the United States will also allow cities like Portland Oregon to create more green spaces and transform cities from “urban jungles” to environments where both nature and modern life thrive.
Without owning vehicles how will Millennials and other renters get around in by 2030 and beyond? Right now we’re seeing the growth of ride-sharing services like Uber that are making transportation easy in major cities and well before 2030 we can expect to see the growth of driverless ride sharing services like “Snuber”, a new driverless ride-sharing service that’s launching in South Korea and is expected to be on the roads of the United States sometime in the near future.
It’s Still All about the Economy
All talk about growth aside we still have to remember that growth in the multi-family Portland Oregon Apartments market won’t happen unless the economy continues growing. As of 2016 the economy has remained strong and has seen steady growth, especially in Oregon, a state that many people are relocating to escape the high cost of living, taxes and housing costs that they may have faced in California and other states.
If the economy were to “tank” again within the next 15 years, causing another “Great Recession” we could see fewer homeowners than we have now in the future, especially among Millennials because it’s likely that individuals from this age group will not be eager to buy a home only to have their equity wiped out like their parents, family members or friends experienced during the 2008 economic collapse.
Although we can’t predict the future, it’s easy to see that when you look at all of the factors influencing the Millennial generation that this is a generation with a ton of influence that will be driving the Portland Oregon Apartments market over the next 15 years and far beyond that.
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