A Snapshot of the Pacific Northwest Multifamily Housing Market

Rents continue to trend up across the U.S. and as we head into 2022 our submarket reports clearly show this unprecedented growth. Vancouver and surrounding cities continue to perform exceptionally well, partly due to the City of Portland’s rent restrictions as investors look across the river for comparable deals with less hassle. Portland Metro, for all its “negative news,” still had exceptional rent growth while absorbing over 10,000 units. Lots of action in the suburbs as tenants still looked for larger digs and a bit lower rent in those outlying areas. Our neighbors to the east in Tri-Cities enjoyed incredible rent growth at 14.4% with a vacancy rate 3.2%. They have a solid and varied economic base; agriculture, healthcare, manufacturing, retail, and construction (not to mention some great wineries too!). TMG officially opened our Tri-City office in October 2021. We’ve been managing property in the area for over 10 years and we’re looking forward to providing an even a higher level of service to our local and out of the area investors. Read below for specific submarket snapshots.

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VANCOUVERMultifamily

12 Mo. Delivered Units
1,767

12 Mo. Absorption Units
1,850

Vacancy Rate
4.0%

12 Mo. Asking Rent Growth
9.0%

Vancouver’s rent growth has outperformed the overall Portland-metro for the past six years. Year over year rent growth stands at 9.0%.
Even before the pandemic, the Vancouver submarket consistently saw some of the strongest rent gains across Portland, with an average of 4.4% over the past five years.
Vancouver rents currently sit at $1,510/unit, just below the larger metro rents at $1,520/unit. Over the past decade, cumulative rent gains amount to approximately 57.4% versus the larger metro growth of 47.2%.

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2021-Q4_Vancouver Overall & Stabilized Vacancy

2021-Q4_Vancouver Rent Per Unit and Rent Growth

PORTLANDMultifamily

12 Mo. Delivered Units
6,395

12 Mo. Absorption Units
10,355

Vacancy Rate
4.7%

12 Mo. Asking Rent Growth
9.1%

Vacancies in Portland have trended downward since mid-2020 and have dipped below the frictional 5% mark.
Apartment demand remains strong going into 2022. The region, aside from its troubled downtown, still has robust in-migration, which underpins apartment demand.
Average apartment rents rose by 9.1% over the past year, compared to the three-year average of 3.8% and the national average of 11.1%.
2021 gave way to substantial rent growth well over 10% in outlying suburban communities, and 5% growth in the pricier central submarkets.

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2021-Q4_PDX Overall & Stabilized Vacancy

2021-Q4_PDX Market Rent Per Unit & Rent Growth

SALEMMultifamily

12 Mo. Delivered Units
407

12 Mo. Absorption Units
655

Vacancy Rate
2.3%

12 Mo. Asking Rent Growth
6.1%

Rent growth in the Salem market was at 6.1% at the end of 2021. Cumulative rent gains over the past decade are 58.2% compared to the national average of 40%.
Asking rents are still about 1/3 higher in the nearest major market, Portland, than in Salem. Annual rent growth is typically below the statewide rent cap of 7%.
Salem’s vacancy rate has remained under 6% for over a decade. At the end of 2021, Salem’s 2.3% vacancy rate is below the current national average of 4.5%.

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2021-Q4_Salem Overall & Stabilized Vacancy

2021-Q4_Salem Rent Per Unit and Rent Growth

TRI-CITIESMultifamily

12 Mo. Delivered Units
352

12 Mo. Absorption Units
523

Vacancy Rate
3.2%

12 Mo. Asking Rent Growth
14.4%

Apartment rent growth in Tri-Cities was 14.6% in 2021, compared to a national average of 12.1%. Rents have consistently grown over the long term, with an average annual rent growth of 4.4% over the past decade.
Vacancy rate has fluctuated in Tri-Cities over the past decade but has maintained a general downward trend over long term. The current market vacancy rate sits at 3.2%.
Annual net absorption sits at 520 units over the course of 2021, with an average of 290 units per year over the past decade.

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2021-Q4_Tri-Cities Overall & Stabilized Vacancy

2021-Q4_Tri-Cities Rent Per Unit and Rent Growth

Eviction Moratorium Updates:

Washington: Washington’s eviction moratorium ended on October 31, 2021 and current rent has to be paid on time. Tenants who have balances from the emergency period (March 2020-October 2021) have 14 days to agree to a reasonable repayment plan, apply for rental assistance, or participate in ERP. If tenants fail to comply or participate they can face eviction. Senate Bill 51160 provided guidelines for a slow transition from the mratorium that allows late fees starting January 2022.

Oregon: Oregon's eviction moratorium ended on June 30th, 2021 and tenants are required to pay rent on time or may be subject to a Notice of Nonpayment of Rent. Rent or money owed from the emergency period (April 2020 - June 2021) is still protected from eviction or collections until June 30th, 2022 due to Senate Bill 891. Tenants can still be evicted if current rent is unpaid. Additionally, another bill (Senate Bill 5561) allocated $100 million for rental assistance. $5 million was allocated to administrative costs to speed up the processing of rental assistance applications, and $10 million was added to the Landlord Guarantee Fund for landlords to recover lost funds due to canceled, denied or unprocessed rental assistance applications.

This Multifamily Market Pulse brought to you by TMG Multifamily, an AMO accredited property management company providing a full suite of management services for existing apartments, new developments, lease-ups, and mixed-use properties. TMG partners with investors to proactively identify strategic opportunities and maximize their return on investment. Locally owned and regionally focused, TMG has been helping clients reach their financial goals for more than 30 years.