The state averaged the third largest yearly drop in rent prices in the country, with prices in the Portland metro area leading the fall.
Rent prices for Oregon apartments are coming down quickly, a new report from Rent.com finds, with Oregon rent prices falling 5.66% annually between July 2022 and July 2023. The state ranks third in the country for fastest-dropping rent prices, behind Washington (-7.72%) and Pennsylvania (-5.76%). The rent slide is even steeper in the Portland-Vancouver-Hillsboro area, which saw a 9.81% annual decline in rent prices, according to the report.
Jon Leckie, a researcher and data scientist for Rent.com, says he expects rental prices to continue to drop, especially in the Portland Metro area.
“In Portland and Oregon, they still haven’t found that bottom,” says Leckie. “When you look at Portland from June 2020, to June 2022, so sort of early pandemic until its peak, rents rose 42%. That was $780 in dollar terms. In Oregon it was similar. From 2020 to 2022 it went up about 13.2%, so that was actually more reasonable. But in Portland, I think it’s the part of it is just rent rose so fast, so high, so quickly, that it was a bit of a bubble, and those rents are unsustainable, and they’re starting to come down.”
Leckie says rents in Portland rose quickly because of an uptick in demand from people moving to Oregon. He says now that the demand has cooled, the rental market is going through a correction.
“Our migration data show a lot of moving away from the West Coast, and so a lot of that’s going to be California. And you know, California rents are obviously some of the highest in the nation. And when I think of places that people want to go from California, the first place I think of is Phoenix and the second place I think of is Portland. I think it became when you were untethered from your workplace, and rents were rising quickly, Portland became a pretty popular destination.”
Rent prices in the city of Eugene are outliers. Rent in the city rose by almost 13% year-over-year, according to Leckie.
Monthly data from Zillow.com also show a 13% annual drop in median rental prices in Oregon across all residential property types, including apartments, condos, rental homes and townhomes. The Zillow data show Oregon median rent at $1,800, $300 below than the national median price.
The reduction in median rents in Oregon bucks national trends. National rents rose 0.31% in July, slightly lower than June’s 0.50%. Year-over-year, rents increased by double digits from October 2021 through August 2022, peaking at $2,053 and averaging yearly changes of 14.65%.
Renters continue to face challenges affording rent across the state. In June, The National Low Income Housing Coalition released its annual “Out of Reach” report, which found According to the study, Oregon renters must earn $29.72 an hour to afford a two-bedroom apartment, while paying 30% of their overall income towards rent, which the Oregonian noted was double the amount of Oregon’s minimum wage.
The Rent.com report also noted landlords trying to put increasing prices on renters in other vectors. A recent National Consumer Law Center report revealed that additional rental “junk” fees, such as pet fees, deposits, pest control fees are worsening the affordable housing shortage.
Leckie adds that he expects rent prices in the Portland metro area to continue decreasing, giving renters more power with landlords as they renegotiate leases.
“More landlords have vacancies that they are trying to fill, but there are fewer people looking for them. And so that’s when they start dropping prices,” says Leckie. “I always encourage people to always try to negotiate. The worst they can really do is say ‘no’. It may not have been worth your time last summer, just because of where the market was. But I think particularly now, it’s definitely worth a shot.”