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About The skanner. (Portland, Or.) 1975-2014 | View Entire Issue (April 22, 2015)
HOUSING Rent continued from page 1 MORE JOBS, MORE COMPETI- TION During the last recession many workers who lost their jobs moved in with relatives or took on roommates. About 32 percent of U.S. adults were living with roommates or adult family members in 2012, up from 27.4 percent in 2006, according to Zillow, an online real estate firm. Stepped-up hiring has begun to reverse that trend. About 2.8 million more Ameri- The three metro areas with the biggest annual increase in rent in January, accord- ing to Trulia: Denver (14.2 percent), Oakland, California (12.1 percent), and San Francisco (11.6 percent). Job growth in each of those cities also eclipsed the national growth rate of 2.3 per- cent over the 12 months ended in January. Employment grew 3.7 percent in Denver, 2.7 percent in Oakland and 4.5 percent in San Francisco. HOMEBUYING DELAYED Traditionally, renting has been a stepping stone toward homeownership. When rents rise, tenants are motivated to buy sooner, 80 percent of new complexes, Nadji estimates, are high-end projects aimed at renters willing to pay a premium for amenities like gourmet kitchens and concierge service cans have jobs than 12 months ago. “The share of young adults with jobs has climbed in the past year, and that will help many of them move out of their parents’ homes,” says Jed Kolko, chief economist at online real estate firm Trulia. “Most of them will be renters first.” More people vying for apartments helps drive rents higher. And metropolitan areas with faster job growth are generally seeing higher-than-average rent hikes as well. especially when interest rates are near his- toric lows, as they are now. But these days, renters are taking longer to buy. The U.S. homeownership rate ended last year at a 19-year low of 64.4 percent. Between higher rents taking a bigger bite out of the bank account and sharply higher home prices, potential buyers are having more trouble saving for a down payment and qualifying for a mortgage. And many millennials, or 18- to 34-year- PHOTO BY JERRY FOSTER month’s rent. Here’s a closer look at why apartment dwellers will probably see rents go up for a sixth straight year. olds, simply prefer renting. That’s true for Alyssa Hankins, a market- ing and social media strategist in Los Angeles. She moved in February to a newly opened complex where rents range from $2,325 for a studio to $5,920 for a two-bed- room unit. She wants to be able to move quickly if a job opportunity comes up. “It’s less about affordability and more about flexibility,” says Hankins, 29. When renters stay put, fewer apartments are available for new tenants, which in turn drives up rents. NEW APARTMENTS ARE PRICEY Developers added 238,000 apartments nationwide last year, a 14-year high, with another 210,000 expected this year, accord- ing to Marcus & Millichap. In theory, more apartment construction should help bring down rents because land- lords would compete for tenants. But 80 percent of new complexes, Nadji estimates, are high-end projects aimed at renters will- ing to pay a premium for amenities like gourmet kitchens and concierge service. How much of a premium? The average rent for apartments completed last year was $1,721. That’s 46 percent higher than the average apartment rent for older units, according to Marcus & Millichap and data provider MPF Research. “There’s very little new supply being added anywhere else,” says Nadji, “so that’s why there’s so much pressure on rents and very little choice for the average renter.” Save the Date The 2nd Annual East Portland Housing & Resource Festival “A Family Fun Event” Saturday, August 8, 2015 12 noon to 7pm Lents Park (SE 92nd & Holgate Streets) • • • • • • • Activities include: “Homes for Sale” Bus Tour Local Talent Show Market/Information/Food Vendors Resources for new home buyers, renters and existing homeowners Free Giveaway’s Live Music/Entertainment Kids Area with face painting, puppet show, and other activities Open and FREE to the Public For additional information or to register as a vendor call 503-595-3517, ext. 301 Page 8 The Portland and Seattle Skanner April 22, 2015
