News flash……..Portland is groovy, but wait……so is Seattle, San Francisco, San Diego……..

Rents are going up, and fast, everywhere.  Rents have always been super high in SF, and all those cities besides, well above Portland rents across the board.  But with all things as they are now, Portland has it’s own rental renaissance going on, and over this past 3 years in particular, I haven’t seen a run like this in the 26 years I’ve been involved with rental property, 23 of those years as a real estate agent/broker. 

Every trade magazine/newsletter has it’s own blah blah blah reason this, and that, on increasing rents……and how they are going thru the roof, while last year, all the same mags/newsletters said the infill mid-rise development was going to hammer the rental market across the board with too much inventory……which in theory could still happen, but in my genre of the SF to 10 unit properties, no dice I say, our rents will stay on the rise, as long as the property has good location, good amenities, a scooch of quality in materials and a slice of outdoor space too.  All I see right now is full steam ahead.

Which gets me to an interesting phone call yesterday from an existing tenant……we talk about landscaping details, and then the segue into “everytime you call Chris, I’m worrying about the rent going up”.  I’ve never pulled any punches on rent, I tell everyone the same thing, loaf of break costs more, rent will cost more…..but I’m also very judicious on handing out rent increases, I’m on the landlording side of the equation, so of course rents matter.   But I am very mindful that quality of tenure at a property matters too, so I look to strike the delicate balance of supply/demand relating to rent and the need to keep existing tennats happy.

As we chatted, the question posed to me was generally what/why has rents gone up so much.  Well, it’s really a three edged reason…..first one we can all understand is simple supply and demand….and that cause has been Portland’s population growth, especially in the core areas of Portland proper.   More people want in than going out, it’s that simple.  Second cause, was the recession…..basically, almost 10% of owners were bounced out of home ownership and now have become renters.  Third cause, home prices have shot up fast in the core, and it’s still way cheaper to rent in the core then to buy…..so as homes in the core get more expensive, so go the rents upwards because if you want to live in the core but can’t afford the buy in, you will rent. 

Lets go back to population growth and dissect that for a bit….the right segment of the population needs to grow for a given area to increase in rents……in Portland’s case, the under 35 crowd is where we are growing most, they tend to be highly educated, and they tend to be rather simplistic in life style approach.   What I see over and over again, is a simple lifestyle means “I” can pay more in rent, go out to dinner more, go to the coffee shop more…..and I may or may not use a car…….so there is a high valuation put on the location in general for this group.  Add it all up, I just described just about every area eastside, west of 82nd Avenue.   

The other thing I’ve experienced in all the turnovers for 2014, is job transportation……what I mean is this, applicants show up with a job, but it’s not a Portland job, it’s a job they bring with them.  There are so many companies out there now where telecommutting is real, but it’s not in the sense that I live in SE Portland and telecommute to Nike in Beaverton.  It’s way bigger than that……it’s a I live in SE Portland and telecommute to Los Angelos or Seattle or wherever!   It’s this latter telecommuting phenomenon that has been what I’ve seen that is truly different in our economy now, and in one years worth of retrospect, I think this is clearly the wave of the future for our fair city.

Last note, has anyone noticed the bloody freeway traffic these days………OMG, it’s a chore I say, it’s a chore!

Happy Holidays, and here is to 2015!