Is Portland nearing a real-estate peak?

Supply may be exceeding demand 
What's ahead for the apartment market in Portland?

Portland in the throes of an apartment boom, and with every boom comes a bust.  The trick is in knowing when the peak of the market has come and gone.  With all the recent construction activity, the experts are wondering when the apartment market will be saturated with rental units.

 

The Oregonian, October 15, 2014  By Elliot Njus
Is there an end in sight to Portland apartment-building boom?  

 

The Hassalo on Eight development in Portland's Lloyd District, which is expected to 

deliver 657 apartments in 2015. (Elliot Njus/The Oregonian)

It's been more than three years since the Portland area's apartment building binge started.

But there's another three years of projects already in the pipeline, industry watchers say. Among them are bigger, more ambitious projects that won't come to market until 2016 or 2017.

"It's a great time to be in this business," real estate economist Jerry Johnson told a gathering of apartment managers and owners. "We believe there's still life left in this party."

But, he added, it will eventually come to a halt. "You might want to start thinking about the hangover."

Daily Jpurnal of Commerce, October 23, 2014  By Shelby King

Portland apartment sales could hit $1.3B by year’s end

Portland’s booming multifamily market isn’t profitable only for developers, but also for investors and property owners through sales.

Though the number of apartment buildings sold in the Portland area is down from this time last year, the total amount investors have paid for them is higher.

Frick said institutional buyers want to put their capital into hard assets in markets like Portland because of factors such as the strong job market and the in-migration of new residents. In addition, limitations on urban sprawl contribute to increased property values.

Boxer said she’s also seeing some of her clients selling their buildings in anticipation of values decreasing when the wave of newly constructed apartments hits the market.

“In the last three years we only added 9,000 new units,” she said. “Now there are about 23,000 planned or under construction.”

Boxer believes the Portland multifamily market is at the top of its cycle and predicts the new construction will result in approximately a 6 percent vacancy rate by this time next year.

“The amount of sales is a sure sign that some people realize we’re at the top of the multifamily real estate cycle,” Boxer said. “If you’re ever going to sell, now’s the time to sell to maximize profit.”