Backed by solid job growth and in-migration boosted by a healthy quality of living, Portland’s multifamily market continues to be strong. With more than 5,000 units coming online in 2018, rents started to cool off, increasing by 1.9 percent year-over-year through February, below the 3.6 percent national average.
Oregon has attracted national attention due to its enaction of statewide rent control limits. The law limits rent increases to 7 percent plus inflation and capital expenses and applies to properties older than 15 years. Although the immediate impact might be slight, the concern is that it will lead to tighter limits down the road. Economic growth is healthy. The metro added 27,500 positions in 2018, a 2.4 percent year-over-year employment growth rate. The construction boom taking place in the metro is supported by the office sector, which has more than 2.4 million square feet of space under construction.
With more than 9,320 units underway and some 6,900 units expected to be delivered this year, there are major concerns about oversupply, but a strong occupancy rate is indicating that there is a rapid absorption of new deliveries and demand for housing outpaces supply. The high occupancy rate and steady rent growth are drawing investors to the metro. With demand high, we expect rents to rise 1.9 percent in 2019.