Asking rents for one-bedroom apartment units in Portland, Oregon, have risen steadily since January and are now positioned above pre-pandemic levels as residents flock to the metropolitan area’s suburban properties. Watch the video HERE!
The fast pace of rent growth in these less dense, more affordable neighborhoods — which are up nearly 4% since January 2020 — overshadowed some progress for the downtown core areas. Rent contractions resulting from the pandemic in the denser neighborhoods appear to have bottomed out around the turn of the year and have now risen nearly 2% in the first quarter.
Companies’ willingness to extend remote work has continued to attract new residents from more dense and expensive markets such as Seattle and the Bay Area. Search activity in the early months of the year for Portland rentals on Apartments.com rose sharply to near-record levels. This will likely create a stream of new leases.
The most recent quarterly change in demand outpaced new supply, causing the market’s vacancy rate to compress. Downtown and surrounding urban neighborhoods currently present the most supply risk, with over 2,000 units under construction. Upward pressure on vacancy rates in these submarkets should materialize in the coming quarters as these units deliver.