Josh Lehner, an economist that works for the Oregon Office of Economic Analysis, continues to do excellent work. Earlier this month he released a blog post (SEE HERE) in which he predicts that 2015 could be a peak renter year for Portland. How did he arrive at this conclusion?
Josh looked at demographic data from the census bureau which shows that the bulk of millennials, a large population cohort for Portland, are currently right around 25 years old. They are at the beginning of what he refers to as “root-setting” years (ages 25-45). During these years people tend to get married and have children and as a result create new household formations. For example, presently 80% of 25 year old’s in Portland rent their home (implies 20% own). Comparatively, approximately 30% of 45 year old’s rent (meaning 70% own their homes).
In 10 years 35 year old’s will be the single largest age cohort according to population projections. If we assume that 50% of them will own and 50% will rent (current breakdown for 35 year old’s) then we’d assume demand for home ownership to rise in the next 10 years.
Josh predicts that demand for multi-family housing (think apartments, 2-4 unit plexes, and condo’s) could weaken and demand for detached single family homes in good school districts will grow. A word of caution, he acknowledges that tastes and preferences can change over time and given that rents and home prices continue to rise in Portland it’s difficult to know how the future will play out.
That said, it is a very interesting post and worth a read.
