PORTLAND – Kylie Snyder loved the two-bedroom apartment on Danforth Street.

The 1,200 square feet, the exposed-brick living room and the modern kitchen seemed perfect for her and her boyfriend, who is moving to Portland this summer.

But when Snyder told the owner they’d happily rent it for the advertised price of $1,150, Snyder received bad news.

“The people before us had already offered $1,200 because two other people wanted it,” Snyder said. “And the couple after us — it turned out — was wiling to pay $1,300. So it was out of our price range.”

Snyder’s experience is representative of a surprising new phenomenon in Portland, where a flooded rental market has left prospective tenants bidding against each other for mid- and upper-level apartments.

In some cases like Danforth Street, people have topped the asking price on in-demand apartments.

In other cases, prospective tenants have offered larger security deposits, multiple months of rent in advance and other enticements to land the apartment they want, said Veronica Schneider, manager of Schneider Property Management.

Although Schneider doesn’t allow prospective tenants to bid against each other or offer higher prices, it hasn’t stopped people from trying.

“People are willing to throw whatever they can at us to get the property,” she said.

Schneider, who also owns Green Tree Realty, said this is the first year she’s seen or heard of people trying to outbid each other on rental properties since she began managing properties in 1998.

Other industry insiders also said it’s a new phenomenon.

Linda Bancroft-Norden, owner of Aquarius Property Management, oversees 61 rental properties in Portland and is a board member of the Southern Maine Landlord Association.

At a recent SMLA meeting, she heard from the group’s chairman about prospective tenants bidding on rental properties, which she had never heard of before.

A confluence of factors has led to this ultracompetitive market, Bancroft-Norden said.

• First, Portland has become a desired market because it took less of a hit than other cities during the recession.

• Second, frozen credit markets have made it tough for people to get mortgages for houses and condos, which has sent those people to the rental market.

• Third, Portland still has lower prices than other cities like Boston and New York, so those who do relocate here are sometimes willing to pay higher prices for a quality apartment.

“As soon as we hit the submit button for the posting on Craigslist, the phone starts ringing,” she said. “It’s incredible.”

Exacerbating the issue is an increase in foreclosures, which has also redirected more people to the rental market.

In 2008, banks made eight foreclosures within the city limits. In 2010, that number skyrocketed to 173 foreclosures, an increase of 2,000 percent, according to the city’s legal department.

The high foreclosure rate has continued into 2011.

Last month, after posting an advertisement on Craigslist, property owner Elizabeth McLellan showed a rental unit on Deering Street to more than a half-dozen groups over a two-day span.

At least three of those groups decided they wanted the apartment.

One offered the advertised price of $1,200.

Another offered to pay four months rent in advance.

A third group said they would pay $1,300.

Once all the groups made their case, the winning bidder wound up paying $1,325 per month.

“I’ve never seen it before,” McLellan said of the bidding process. “But it’s competitive. People want highly kept-up, well-maintained properties. It’s what the market will bear.”

Staff Writer Jason Singer can be contacted at 791-6437 or at:

jsinger@mainetoday.com

 

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