A recent article by Oregon Live brings good news to rental owners and disappointment to tenants. According to Apartment List, May marks the third straight month of Portland’s rent increase, finally rising after plummeting in 2020.
Portland Rent Rise as Pent-Up Demands Escalate
According to a housing economist at Apartment List, the rent increase may be due to people looking forward to the pandemic’s end and an escalation of potential tenants’ pent-up demands. A comment from CoStar’s director of market analytics for Oregon and Idaho also predicts further rental price hikes as downtown businesses reopen, creating the need for employees to live closer to their workplaces.
Rents Rebound in Most Portland Areas
Rental prices rebounded in most Portland neighborhoods except Northwest Portland and Southeast Portland, which remained down for 4.5% and 2.2% year-over-year, respectively. Southwest Portland experienced a 2.5% increase in average rent while Northeast Portland scored 1.2%.
Portland Rent Still Lower Than April 2020
Compared to April 2020, Portland’s average apartment rent still costs 4% lower. Oregon rentals cost 1.1% higher in April 2020 than this year, and Portland ranked 14th among the largest cities to steeply lower rental prices among 100 large cities during the pandemic.
Suburb Rent Increases Faster than Downtown
Rents in the suburbs rose during the pandemic and continue to grow faster than other areas in Portland during the pandemic, attracting plenty of tenants telecommuting from work or permanently working from home. Yet as the pandemic’s threat fades, rental price hikes downtown should still be expected.
Rent Rise Higher in Multifamily Units
Most apartments with increased rents were multifamily units, according to Apartment List. The average rent of a two-bedroom apartment now costs $1,344, showing an increase of 1.8% from March to April. The average rent for a one-bedroom apartment sits at $1,153.
Portland Apartments Gain Traction as Demand Increases
Apartment List predicts that Portland will continue to be in demand as one of the most desirable cities, especially as the pandemic reaches calmer points. Two-thirds of multifamily projects in Portland were halted last year, and the lack of units but higher demand for them will lead to continuously higher rental prices.