A large-scale survey of landlords and housing operators in Oregon showed a mixed picture for the multifamily market, with average rents rising across the state despite a modest increase in vacancies.

Rents rose 3 percent from a year ago to $2.11 per square foot. The vacancy rate in the Portland and Vancouver metro area grew to 5.47 percent, up from 4.49 percent a year ago.

The data comes from Multifamily NW’s biannual Apartment Report. The organization surveys 460 properties totaling 42,000 units.

Multifamily brokers saw a silver lining in the data.

“I feel like we’ve kind of hit a bottom for valuation,” said Greg Frick, co-founder of HFO Investment Real Estate, in an interview. “We have seen a pick-up in investment activity.”

Multifamily buyers have stopped expecting bargain-basement deals, said Frick, who serves on the Apartment Report’s advisory committee. “They’ve come up a little, and sellers have come down a little,” he said.

Multifamily transactions grew to 93 deals in the Portland metro area during the first nine months of the year, up from 80 for the same period in 2024. Dollar volume likewise jumped 55.3 percent to $1.53 billion. Capitalization rates hovered around 6 percent.

Little new supply is expected to come online: Only 2,000 units were under construction this fall, leaving the metro area’s pipeline at its lowest level since 2011. That should help buoy rents, but does little to address the ongoing housing deficit, analysts said.

Multifamily NW hosted a release event for the report at the Oregon Convention Center. Speakers gave a dizzying blizzard of starkly negative economic data and positive anecdotes.

Mayor Keith Wilson, in the keynote speech, gave several examples of what he calls “boom loop” thinking that will contribute to Portland’s economic revival.

Wilson pointed to proposed development at the Oregon Museum of Science and Industry district and the Broadway Corridor. Visitors are coming back to Portland, with hotel occupancy up 5 percent from 2024, he said.

The James Beard Public Market is under construction downtown and efforts are underway to revitalize some of Portland’s most blighted areas, including parts of the Old Town- Chinatown neighborhood and Water Avenue in Southeast Portland.

“We are going to build back Portland better right now, with or without the federal government,” he said.

The city is also working to help developers build housing, including by waiving system development charges for housing for three years, by expanding video permit inspections and eliminating bureaucratic bottlenecks.

“We will not hold up your dreams in Portland,” Wilson said.

Wilson’s upbeat remarks were immediately followed by a notably dreary economic forecast by Mike Wilkerson, director of economic research for ECOnorthwest. By some economic indicators, Oregon and Washington are in a recession while most of the rest of the country continues to grow, he said.

The state has lost 18,300 jobs in the past year, a majority of which were in Multnomah County, he said. Portland is one of only five of the top 50 metro areas in the U.S. seeing job loss.

“We are very much the exception to the rule,” Wilkerson said. He added that Oregon and the U.S. are likely to see population begin to decline unless the nation allows more immigration.

Nationally, Moody’s Analytics recently put the odds of a U.S. recession in the next 12 months at 48 percent.

The share of cost-burdened renters in the Portland area remained unchanged in the past decade despite a well-funded push to build affordable housing. Those efforts have only succeeded in keeping the numbers stable, Wilkerson said.

“We would certainly be worse had we not done what we have done,” he said.

Industry officials said Portland must do more to attract jobs, housing and economic activity.

“We need to figure out a way to be competitive,” Frick said. “As a region, we rest on our laurels a little bit — that people will come no matter what. I think that’s changed.”

The post Oregon multifamily rents rise amid higher vacancies appeared first on Daily Journal of Commerce.