There may be thousands of new Portland-area apartments in the works, but that hasn't halted rising rents, nor eased the competition between would-be renters.
According to a survey conducted by the Metro Multifamily Housing Association released Wednesday, the apartment vacancy rate is resting at 3.63 percent. That's down slightly from the 3.7 percent rate reported in April, but higher than the 3.34 percent seen one year ago.
Still, monthly rent checks are getting bigger. Compared with a year ago, rents have risen 6.2 percent to about $1.03 per square foot. The average one-bedroom apartment rents for $774 a month, up from $706 last October.
The apartment boom rests on growing post-recession demand. Former homeowners who lost their home in foreclosure are now renting, and people who had moved in together to save money are now moving out on their own, filling more apartments.
"More and more young people are living alone in their apartment," Liz Tilbury, owner of Tilbury Ferguson Investment Real Estate Inc., told a gathering of MMHA members.
Studio apartments, in particular, are growing more popular. As a result, the average rent for studios has grown 30 percent in two years, far faster than other apartment types.
Developers saw the growing demand coming, and early birds who started construction months ago are now bringing their projects to the market. Nearly 3,000 apartments are leasing or will start seeking tenants by the end of the year, according to to HFO Investment Real Estate, and another 6,000 are planned in 2013 and 2014.
The looming construction has made landlords a little nervous, and Mark Barry, a Portland apartment appraiser, said he wouldn't be surprised to see vacancy closer to 5 percent in coming months.
Still, times are pretty good for owners of apartment buildings.
"Here we are, in a market with low vacancy, rising rental rates and low interest rates, and apartments being the darling of investment and lending," Barry said.
What's good news for property owners isn't as welcome among tenants.
Renting is getting more expensive, and it's only gotten harder to find an apartment. The average number of days an apartment stays vacant between tenants has fallen from 43 to 37 days since April. In the area's hottest apartment market, inner Southeast Portland, apartments are vacant for just 11 days on average.
And while some relief may be on the way with new construction, that might still be months or years away.
"They're not all going to be delivered tomorrow," said Sam Rodriguez, managing director for developer Mill Creek Residential Trust.
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