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Portland Plex Report July 2011

According to the latest analysis of home price trends in 384 markets based on the Fiserv/Case-Shiller Indexes, Portland’s prices are expected to stay flat through next March and then record double-digit gains of just over 10% each over the following 12 months.

Source

Portland Business Journal – by Wendy Culverwell
Date: Thursday, May 5, 2011, 2:14pm PDT

Portland has the nation’s tightest apartment market, according to figures released this week by the U.S. Census Bureau.

With a vacancy rate of just four percent, Portland’s rental market is the lowest of 75 metropolitan areas tracked by the government.

Separately, the National Multi Housing Council released results of an industry survey that shows improvement in everything from occupancy rates to rents.

In a rare sign of consensus, every executive surveyed by the NMHC for its quarterly survey reported broad improvements in occupancy rates and rents.

Executives also reported improvement in access to both debt and equity to finance properties and an increase in sales activity. That’s good news for area developers who have up to now had a difficult time securing financing.

“The apartment industry rebounded strongly in 2010 as demand for apartment residences outpaced the sluggish recovery in the market nationally, said Mark Obrinsky, chief economist for NMHC.

According to the survey, a record 54 percent reported they had greater access to capital in the most recent quarter.

“Investors are well aware of the apartment recovery and are eager to deploy capital in the sector,” said Doug Bibby, president of the industry organization

Read more: Portland apartment market leads nation | Portland Business Journal

Top 100 U.S. markets lead the world in economic clout
by G. Scott Thomas
Tuesday, May 3, 2011, 8:24am EDT -

America’s 100 largest metropolitan areas wield more economic clout than any other nation in the world.

The gross metropolitan products (GMP) of the top 100 markets equal $10.56 trillion, according to a new On Numbers study of U.S. Bureau of Economic Analysis data. (See the bottom of this story for a full list.)
That’s roughly twice the economic power of the most powerful foreign country.

A 2010 report from the International Monetary Fund named China as the world’s second-biggest financial power with a gross domestic product (GDP) of $5.9 trillion. The World Bank said in 2009 that Japan was No. 2 worldwide with GDP of $5.1 trillion. (America’s GDP surpassed $14 trillion in 2009.)

On Numbers analyzed GMP data for 2009, the latest year for which official figures are available. GMP is a local-level version of GDP. Both measures reflect the total output of goods and services within a given area in a given year.

The New York City area is the national leader with GMP of $1.21 trillion. Next are Los Angeles at $731 billion and Chicago at $509 billion.
Twenty-eight U.S. metros have gross metropolitan products of $100 billion or more, and another 23 are above $50 billion.

The database below ranks all 366 U.S. metropolitan areas according to 2009 GMP. The list can be re-sorted alphabetically by clicking on the metro area column.

CLICK HERE FOR FULL LIST

Read more: Top 100 U.S. markets lead the world in economic clout | The Business Journals

Oregon renters squeezed by rising rents
Portland Business Journal – by Wendy Culverwell
Date: Tuesday, May 3, 2011, 10:51am PDT

Oregon’s tight rental market is good news for landlords, but rising rents are putting the squeeze on the state’s working poor.

Out of Reach 2010, released this week by the National Low Income Housing Coalition and locally by Oregon’s Housing Alliance, said Oregonians need to earn $15.81 per hour to afford rent and utilities, or twice the current minimum wage, to afford rental housing in Oregon. The average rent for a two-bedroom apartment in Oregon was $822, according to the report, 35 percent higher than in 2000.

The report said Oregon is the nation’s 29th most expensive state for renters.

The national report confirms local studies by Portland’s Metro Multifamily Housing Association and real estate brokerages, which say the vacancy rate for apartments has dropped below five percent and rents are rising.

Janet Byrd, chair of the Housing Alliance, said recessionary pressure, high unemployment and foreclosures make it difficult for low-income families to afford homes.

“In Oregon, we believe everyone needs a place to call home. As we work together to solve the current budget crisis, the Legislature needs to prioritize providing basic needs to those most impacted by the ongoing recession,” she said.

Rents will likely continue to climb in the short term as few new apartment projects get built.

Developers are showing interest in building new properties, but the pace of development is well below average as developers struggle to secure construction financing. Too, apartment rental income has been flat for about four years. Though income is rising with rents, higher utility rates, property taxes and costs are absorbing most gains.

Read more: Oregon renters squeezed by rising rents | Portland Business Journal

According to Trulia’s Q2 2011 Rent vs. Buy Index which tracks the country’s 50 largest cities by population, Portland has been ranked as “Renting less expensive but buying might be better”. Thus indicating that while rental rates are rising, prices remain at an affordable level.
The index also notes the following information:\

Rent:Buy Index = 18
Median Monthly Rent (2 bd) = $500 – $1000
Median List Price (2bd) = $100k – $200k
Population = 556K
Job Growth = 3.4%
Foreclosure Rate = 0.13%
Unemployment Rate = 10%

The full, interactive index can be viewed here: Trulia Q2 Rent vs. Buy Index

Portland Business Journal – by Wendy Culverwell, Business Journal Staff Writer

Further evidence Portland’s apartment market is reaching the overheated stage: The city ranks fourth in the nation for growth in apartment rents.

AXIOMetrics Inc., a Dallas, Tex.-based firm that tracks the apartment market, released its March report on Wednesday.

Nationwide, rents increased 1.77 percent in March compared to a year ago.

Portland recorded a 9.92 percent increase in rents, boosting it to the No. 4 position, from No. 60 are year ago. Naples, Fla. hit the No. 1 spot, followed by San Jose, Calif. and Boulder, Colo.

The top four cities for occupancy rates were San Jose, Calif., Minneapolis, San Francisco and New York.

Read more: Portland rental market No. 4 for growth | Portland Business Journal

Portland Business Journal – by Wendy Culverwell
Date: Thursday, April 21, 2011, 2:28pm PDT –

Portland’s rental market technically is not “red hot,” but figures released Thursday morning by the Metro Multifamily Housing Association suggest it’s getting close.

• Vacancy rates dropped below 4.5 percent in every submarket of the city.
• Income is rising for the first time, though offset by rising insurance, utility and taxes.
• Investors are solidly interested in the area’s multifamily properties, but their interest is not blistering.
The city’s vacancy rate dropped to 3.8 percent in a spring survey of 735 properties representing 49,011 rental units. The association’s bi-annual survey is one of the city’s leading indicators of the health of the apartment market.

The spring survey shows the vacancy rate dropped five percentage points since last fall, when the association reported a four percent vacancy rate in its survey of 546 properties representing 35,091 units.

Average rents climbed to 94 cents per square foot, up 4 percent from last fall’s 90 cents rate.

It’s not surprising Portland’s already-tight rental market is getting tighter. Economic indicators suggest the economy is rebounding and adding jobs, a key factor that drives apartment rentals.

Oregon is posting solid economic returns on almost ever measure, said Amy Vander Vliet, Portland area economist for the state. Residential housing permits climbed slightly while unemployment claims fell and employers reported an increase in temporary hiring, which economist see as a precursor to formation of permanent jobs. Consumer confidence is up, and businesses are ordering more capital goods, which is good news for a state that depends on business spending.

“Our companies make stuff that other companies want to buy,” Vander Vliet told a crowd of apartment owners, managers and brokers. On the down side, she said it will be several years before Oregon recovers the 120,000 jobs that have disappeared since the recession began. Economists expect the state to add 22,000 jobs this year.

Kelly Cassidy, vice president and loan officer for Q10 National Mortgage Co., said lenders are increasingly interested in financing multifamily projects. Fannie Mae, Freddie Mac and the U.S. Department of Housing and Urban Development were the only lenders for the past few years; now, insurance companies, banks and conduit lenders are eager to buy multifamily debt.
“It’s been a while since we’ve been able to say that,” he said.

The vacancy rate in key submarkets:
• Downtown Portland 3.9 percent
• Northwest Portland 4.5 percent
• Inner and Central Southeast 4.0 percent
• Southwest Portland 3.7 percent
• Clackamas 3.4 percent
• Lake Oswego/West Linn 3.6 percent
• Milwaukie 4.4 percent
• Aloha 3.1 percent
• Beaverton 3.3 percent
• Hillsboro 3.1 percent
• Tigard/Tualatin 3.8 percent
• West Vancouver 3.8 percent
• East Vancouver 3.3 percent
• Troutdale/Fairview/Wood Village/Gresham 4.4 percent

Read more: Rentals getting tough to find | Portland Business Journal