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A 155-unit apartment project under construction at North Interstate and Skidmore. New apartment construction may ease the apartment demand crunch over the next two years.

(Doug Beghtel/The Oregonian)

Could it get any harder to find an apartment in Portland? Believe it or not, in the past six months, it has.

Fewer apartments are empty in the Portland area, according to a twice-a-year survey by rental industry group

. As a result, rents continue to rise.

And despite an unusually high number of new apartments reaching the market making some landlords wary, the balance isn’t shifting yet.

“This is about as strong a landlord’s market as I have ever seen,” said

a Portland apartment appraiser with about 30 years of experience.

The survey -- which includes responses from 72,000 units and 947 properties -- puts apartment vacancy at just 3.11 percent, down from 3.55 percent in the last report released in April. Portland has one of the tightest markets for rental housing in the nation, according the the U.S. Census Bureau and industry studies.

Renting in Portland

Click on a pin to see the average rent and vacancy rate for that neighborhood or suburb.

Mark Graves/The Oregonian | Source: Multifamily NW



The average empty apartment in the Portland area is leased in about 36 days. But in the hottest markets -- on the inner eastside of Portland -- that turnover period is just 8 days. That means renters may have to be ready to fill out an application and cut a check the first time they see an apartment they like.

"It really has an impact on people looking for decent apartments," said Craig McConachie, one of the authors of the report and principal at C&R Real Estate Services. "They really have to scramble. They're spending time on on Craigslist daily, even hourly, to find a place that's available."

Average rents, meanwhile, have jumped 6.8 percent across the Portland market in six months, in large part due to the addition of 5,000 new, mostly high-end units in developments completed in the past year. For older buildings, the average six-month increase is closer to 4 or 5 percent.

The change has displaced some residents, and forced others to make compromises in location or lifestyle.

Jimmy Douglas and his girlfriend live in a Pearl District studio apartment. The studio isn't ideal because they work opposite shifts, and their rent is set to go up about $100 when their lease expires in November.

But after looking at other buildings, and even other neighborhoods, they found they might be better off staying put. Having lived in the same building for three years, they've seen their rent rise a little slower.

"Most places are so much more expensive than they were a few years ago," Douglas said. "The incremental cost to go from a studio apartment to a one-bedroom -- especially because we have two cars and a dog -- is astronomical. It's kind of a serious dilemma. How much is a closet worth?"

Landlords, on the other hand, saw little need to make concessions over the last six months.

Newly constructed apartment developments are filling up quickly -- within a year in the suburbs and in months in the city. New apartment developments virtually stopped in the recession, leaving behind a shortage compared to historic construction averages and formation of new renter households.

Owners of older buildings are also taking advantage of the good times by adding units, renovating and adding amenities in an effort to compete with new developments.

The apartment construction binge doesn't show any sign of stopping. In fact, Barry said, the growth in the apartment pipeline is only accelerating.

Developers have proposed or started construction on about 20,000 new apartment units in the metro area, though not all will be completed. Barry said 6,200 new apartments are expected to be opened in 2013 -- the most in any year since 1999.

But lease-up is already slowing at some recently completed apartment developments in Portland's westside suburbs, McConachie said. Part of the drop is likely seasonal, he said, but it could also reflect growing competition.

"The smart money is saying if you're not out of the ground now, or very close to getting out of the ground, you might have missed the boat," he said.

The coming wave of new units should give developers and landlords some reason to be wary in 2014 and beyond, Barry said, especially on high-end properties.

“How deep is that market,” he said, “for rents at $2 or $2.50 per square foot?”

-- Elliot Njus