Portland Multifamily Report – Summer 2019
Due to a combination of peak development and weakening employment gains, year-over-year multifamily rent growth in the metro decelerated to 1.2 percent.
Portland rent evolution, click to enlarge
Portland’s stable economy, backed by a diverse business climate, continues to attract renters. Nonetheless, due to last year’s development cycle high in the context of dampening employment gains, year-over-year rent growth slowed down to 1.2 percent as of May. Even so, demand for workforce housing remains relatively robust.
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The metro added 21,800 jobs in the 12 months ending in March, a 1.8 percent year-over-year increase, with education and health services leading growth (6,100 jobs). Meanwhile, manufacturing gained 4,500 positions and Intel’s campus expansion in Hillsboro is set to further boost employment. The company is planning a multibillion-dollar facility estimated to employ 1,750 people. Despite labor shortages and rising development costs, the construction segment recorded the largest year-over-year increase through March, adding 2,800 positions for a 4.0 percent expansion.
Portland sales volume and number of properties sold, click to enlarge
While Oregon’s new rent control law could impact Portland’s fundamentals in the longer run, transactions were the first to feel the pinch going into 2019, with only $143 million in multifamily assets trading this year through May. With 6,900 units slated for completion in 2019, we expect the average Portland rent to rise 1.9 percent this year, one of the lowest rates among major U.S. metros.
