The cost of renting an apartment in Portland is falling, reversing years of steady increases and outpacing declines in most other cities. The declines apparently reflect the impacts of the coronavirus pandemic on the regional housing market.
Portland rents were down 5.7% in September compared to the same time last year, with median rents sitting at $1,155 for a one-bedroom apartment and $1,346 for a two-bedroom apartment, according to online rental platform Apartment List.
Only nine other cities with populations over 250,000 saw steeper year-over-year rent declines than Portland, according to Apartment List.
Real estate listings site Realtor.com reported similar findings in an analysis of the nation’s 100 largest counties. Only 10 counties experienced sharper year-over-year rent declines for one-bedroom apartments than Multnomah County.
Rob Warnock, research associate at Apartment List, said that Portland has seen substantial growth and large rent increases over the last decade, which could be a factor in the city experiencing a steeper decline in rental prices now as the priorities of renters change amid the pandemic.
“Portland’s year-over-year rent drop is actually quite high,” Warnock said. “Seattle, Washington D.C., Oakland and Minneapolis are relatively similar sizes and have relatively similar price drops, but the majority of cities have I think more stable rents than we’re seeing in Portland, rent drops that are less significant that 5.7%. In some cases, there are cities where we’re actually seeing increasing rents over the past year.”
Rents in Portland are declining at a much faster rate than both the state as a whole and the national average. Oregon rents are down just 1.5% year-over-year, while apartment rents nationally are down 1.4%, according to Apartment List.
Warnock said that many major cities across the United States are seeing declines in rent, while the rents in nearby suburbs are holding steady, or even increasing. That trend speaks to a shift in demand and preferences brought on by the pandemic, he said. With businesses still closed and people working from home without a need to live close to their offices, suburban areas where renters can have more space and access to the outdoors have become more desirable.
“We are observing that for the majority of American cities, the rent drop in the core city is much greater than it is in the outlying suburban areas,” Warnock said. “What we’re seeing in Portland is consistent with what we’re seeing in a lot of major cities today.”
Realtor.com reports that the median rent for a studio apartment in Multnomah County was $1,300 in September, down 5.5% from a year prior, while the median rent for a one-bedroom apartment was $1,573, down 6.9% from a year prior, and the median rent for a two-bedroom apartment was $2,181, down 0.7% from a year prior.
Portland rents aren’t declining nearly as fast as some of the biggest cities in the country, including San Francisco and New York.
According to Realtor.com, rent in the County of San Francisco was down by between 21% and 31%, depending on apartment size, in September compared to a year prior. That’s the sharpest decline in the nation. Apartment List found that rents in San Francisco were down 20.4% in September.
“The huge declines that we’re seeing are really concentrated in the markets that are the most undersupplied and the most overpriced historically,” Warnock said. “I don’t think it’s a coincidence that San Francisco and New York are the two most expensive markets and are also seeing the two most dramatic decreases in rent right now.”
Downtown Portland is facing distinct challenges brought on by the pandemic, protests and homeless camps. Those factors have contributed to a spike in subleases among commercial properties.
It’s unclear whether apartment rents downtown are dropping at a faster rate than the rest of the city.
Warnock said that Apartment List’s data does not distinguish between rental prices in different neighborhoods, but that trends across the country show the biggest drops in urban cores.
