Up Sucker Creek

Up Sucker Creek
Photo Courtesy of the Lake Oswego Library

Tuesday, June 6, 2017

Where are rents going?

higher?  lower?  holding steady?  

It depends. 

The answer depends upon where you live, but rents are currently trending in the tenants' favor.  For a look at Portland's multifamily market as of May, 2017, see what the Portland State University Center for Real Estate Quarterly Report has to say:
 Multifamily Analysis

By Carlo Castoro 
This year may prove to be the crescendo of a six year multifamily construction and rent growth boom for the Portland metropolitan area. New deliveries and vacancies are up while rent growth is down and even reversing in some parts of the central city core. However, as the saying goes “All real estate is local.” Digging deeper into the numbers reveals robust rental growth in select submarkets while others follow suit with downtown. 

Supply must be catching up to demand! The free market works.  (Duh.)

In case you want to jump in to complain that rents have been and are still too high, then you might want to look back to see that things have not always been this way.  If landlords have been fortunate enough to have had some good years recently, it doesn't erase the fact that there have been some lean years too. When landlords were taking a beating, tenants were not up in arms protesting.

Commercial real estate cycles eventually balance out before they swing in the other direction as supply and demand work to reach an equilibrium, over and over.  Renters and landlords are in this dance together as the balance shifts - unless government interference or an economic disaster upsets the cycles.  Unfortunately, Portland has been discovered - by newcomers as well as investors - which adds extra pressure on rents and wider swings in the cycles.

Luckily for all, nothing can stop the cycle from self-correcting - EXCEPT - ill-conceived government interference, aka: rent control, rent stabilization, inclusionary zoning, etc.  How ill-informed and unreasonable are Oregon governments these days?  

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