Movin' out

You hear the politicos and bureaucrats talk a lot about the rental housing market in Portland. Supposedly it's what's causing the tent and RV camping crisis on the streets. I never trust whatever numbers they are throwing around. Instead, I read the Barry Apartment Report, prepared for decades now by a reputable professional appraiser (and his dad before him).

What he's saying lately is that the apartment business in Portlandia is stagnant at best. Rents, although high, are flattening or dropping, vacancy is back over 6 percent, construction of new units is slowing, and shockingly few existing apartment buildings are changing hands.

Through the first half of 2023, the apartment sales market in Portland Metro has shown an unprecedented slowdown. Through late June 2023, only 35 apartment sales have closed across the four county Metro Area. When annualized, this suggests around 70 sales for the year, or down 70 percent from 2022. To provide some perspective, from 1990 to 2022, there was an average of 208 sales per year with a previous low in 2009 with only 103 total sales.

There are a number of reasons for fewer sales including a dramatic rise in interest rates, greater economic uncertainty, continuing challenges with livability throughout the urban area, some destabilization in the banking sector, and buyers/sellers being unable to agree on current market pricing. Sellers have little urgency to accept lower prices as most owners have a low interest rate loan, stable rent/vacancy, ample equity, and there are few reasonably priced alternative investments.

Barry's bottom line: "If population continues to decline and livability in the urban area does not improve, most of the forecasts herein would show increased pessimism." 

You would think that in a climate like this, the politicians would be nicer to the landlords. But no, just the opposite. Beating up on The Man is the order of the day. I doubt that the lack of cheap flats is the root of Portland's many serious problems, but if it is, the future isn't looking so bright.