Two years ago, as the housing bubble rapidly deflated, Forbes published a list of the Best and Worst Cities to Rent a Home. Portland renters fared well (though Forbes’ average rent figure of $772 per month seemed unrealistically low). I was then a very happy renter indeed.
Now, two years later, Portland renters again fare well, according to the Rent vs. Buy Index published by Trulia, a real estate news and listing site, with different criteria than the Forbes report.
Trulia calculated the price-to-rent ratio using the average list price compared with average rent on 2 bedroom apartments, condos and townhomes listed on Trulia.com. To create the list, Trulia analyzed the largest 50 cities in America, by population.
Here are the top 5 cities to Rent vs. Buy (price-to-rent ratio in parenthesis):
- New York City (33)
- Omaha, Nebraska (26)
- Seattle, Washington (25)
- Portland, Oregon (22)
Average list price for Portland, according to Trulia, is $307,858, and the average rent is $1145. With a price-to-rent ration about 21, Portland falls into the category where the total costs of owning a home in this city are much greater than the costs of renting. (Find more definitions and methodology details on the Top 50 City Rent v Buy Index – pdf).
When the ratio is less out of whack, I may buy some Portland real estate. But until then, I’m quite happy renting: no absurdly high monthly payments, no paying for major appliances and their repair, and I can (and frequently do) move when and where my whim takes me.
All while saving a lot of money.
This makes me feel so much better about not finding a place to buy last summer before moving to Nob Hill. I <3 my apartment, though would one day like more "land" for my plants than my fire escape…
I agree. I used to own a house in MI and it was comparable to rent, no more, no less… but here, my rent is the same as back in MI but house prices are about 3x as much… no thanks.
As long as you don’t buy during the higher points of the market peaks, it is generally a good investment to buy here.
Our prices are still much, much lower than the other big cities on the West Coast and the population is going to keep growing, pushing prices higher.
Not really, Scott. The type of people that are moving here are lower income service industry related California out of towners. These people, who make ten dollars an hour at Starbucks, aren’t going to drive that “$225,000 starter house” price up.
Human beings really do have short attention spans. These $225,000 starter homes today sold on average for $165,000 in 2002. Incomes could support those prices. A city with a median income of $49,000 can not support $225,000 starter prices.