Portland Rents to Spike in 2013
Portlanders, take note:
Portland real estate experts have warned us all: If you think rents are high now, just wait for 2013. “Prices are low, mortgage rates are at historic lows and all the major indicies are positive and suggest that home prices are more than likely increasing. And the trend is in place to reliably predict increasing rents” writes Bob Broad on Portland Real Estate Café.
This isn’t just a Portland thing either, as national experts like CNBC real estate writer Diana Orlick recently predicted that “apartment rents will stay elevated and vacancies low despite the improvement in the housing market.”
What drives this trend?
First-time home buyers are still having trouble returning to the home buying market due to increasingly stringent loan requirements and low inventory of homes in general. The metro’s current offerings are down again this December, over 6% from November, and over 23% from December of 2011. This means more people competing for fewer homes, which has the dual effect of inflating home prices, thereby knocking some buyers to the sidelines; and allowing lenders to work only with near-perfect loan applicants, again sidelining potential buyers with less than perfect credit or who can’t scrap up 20% down.
With more folks unable to buy, you have more renters. And, when renters outpace vacancies, rents go up in response.
If you’ve wondered if being a landlord could be a good way to make income, and perhaps better set yourself up for retirement as well, these indicators say it’s at least worth discussing with your Realtor®, accountant, and mortgage broker.
The indicators also encourage potential buyers, if they’ve been on the fence about jumping into the rel estate game, to dive in. Right now the waters are simply tempestuous. In a few months time, they could have the makings of a super storm. Speak to a local, experienced Realtor® who knows the market in the neighborhoods you hope to own in to get the best, more relevant statistics. And maybe do it sooner, rather than later.
Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert