Market Insights | Winter 2025 | Portland
Winter 2025
Market
Rent
Average
Occupancy
12 Mo. Sales
Volume
YoY Rent
Change
Occupancy
Change
Portland-Vancouver-Hillsboro is the 25th most populated metro region in the US, with about 2.5 million residents. Oregon's largest city, Portland, the "City of Roses," reported a 2024 population of roughly 639,448. Portland's population had declined between 2020 and 2023 but the decline has now reversed due to in-migration and is increasing once more with about 7,500 more people moving to Oregon (excluding Vancouver, Washington). Forecasts estimate Vancouver, Washington, just across the Columbia River, grew by about 3,300 in 2024, reaching nearly 200,000.
Technology, healthcare, manufacturing, and professional services underpin Portland's diverse economy. Portland is known as the "Silicon Forest." for its sustainability and innovation, especially in tech. The region's economy remains strong. Nike, headquartered in Beaverton, and Intel, which has one of its major sites in Hillsboro, are among the Fortune 500 corporations in Portland. Despite recent layoffs, Intel has committed to spending $36 billion in Hillsboro upgrading its manufacturing facilities there.
Portland has one of the 12 Federal Reserve Bank branches, highlighting its economic importance. Over 45,000 enterprises make Portland a magnet for innovation and entrepreneurship. The area's most significant employers include the state's largest employer Oregon Health Sciences University, along with Daimler Trucks North America, Columbia Sportswear, and Precision Castparts.
The Portland metro area attracts multifamily investors with its unique blend of cultural appeal, geographic quality of life, economic stability, and expansion potential.
Employment
Nonfarm jobs employ 1,255,200 individuals in the region, as reported by the Oregon Employment Department as of December 2024. The local unemployment rate is 4.2%, slightly above the national average of 4.0%. Nike and Intel have obtained favorable tax accords through 2042, and both have recently expanded. Despite some recent layoffs at these major businesses, Nike recently completed an expansion of 1.4 million SF of office space, and Intel plans to continue with $36 billion investment upgrading its Hillsboro manufacturing facilities. OHSU has begun construction of a $650M hospital expansion that will create 3,000 new jobs when it opens in 2026, plus an additional $330M expansion for its Neonatal Intensive Care Unit at Doernbecher Children's Hospital. Area job growth is also seen in the biotech and mass timber industries.
| % ∆ from December 2023 | |||
|---|---|---|---|
| Metro Area Employment (Thousands) | December 2024 | Portland | National |
| Total Nonfarm | 1,255.2 | 0.6% | 1.6% |
| Mining and Logging | 80.2 | -2.3% | -2.7% |
| Construction | 79.1 | -1.2% | 2.2% |
| Manufacturing | 120.6 | -2.3% | -0.8% |
| Trade, Transportation, and Utilities | 231.4 | 0.3% | 1.1% |
| Information | 25.3 | -4.9% | -1.0% |
| Financial Activities | 69.8 | -3.7% | 0.5% |
| Professional and Business Services | 194.4 | -1.4% | 2.0% |
| Private Education and Health Services | 212.9 | 7.7% | 2.6% |
| Leisure and Hospitality | 115.8 | -1.4% | 2.4% |
| Other Services | 44.1 | 2.3% | 0.7% |
| Government | 160.7 | 2.2% | 1.8% |
Source: Oregon Employment Department
Rental Market
Multifamily demand in Portland/Vancouver remained resilient in the second half of 2024, supported by the area's stabile economy and population. Key submarkets like Vancouver, Washington have experienced an influx of residents due to job opportunities and tax advantages. Certain renters have recently been gravitating toward more affordable submarkets such as Yamhill County, outlying Washington County, and Clackamas County, where lower levels of new construction and relocations for affordability are driving many suburb vacancy rates below 4%. Select close-in neighborhoods are experiencing vacancy rates of 2-4%.
In the past decade, downtown Portland and surrounding urban submarkets had the most dramatic shift in development in the past ten years with new 4- and 5-star projects. Increased deliveries in competition have resulted in downward pressure on rent growth for high-end offerings, with market-wide 12-month asking rent growth flattening and rents averaging $1,860/unit.
Despite a slight recovery in demand for mid-tier properties, rent growth in this category has also been muted, with 3 Star units posting annual rent gains of 0.8% and utilatarian offerings showing gains of 1.5%.
CoStar expects Portland rent growth to rise about 2% in 2025 and between 3-4% in 2026-2028. Q1 2025 sees 3,200 units underway (a 1.4% expansion of inventory). Groundbreaking in Q4 2024 totaled less than 50 units, which will lead to a dwindling number of deliveries throughout 2025. It is expected to fuel the weakest two year stretch for deliveries since 2012-2013.
Average Monthly
Mortgage Payment
Average Monthly
Rent
Source: Bankrate. Median SP $550K, 20% down, 30-year fixed, APR 6.5%, credit score 720+. Estimated taxes and homeowner's insurance included.
Average Rent / Vacancy
Asking Rent / Bedroom
Multifamily Construction
Portland has always been a leader in multifamily construction, but recent economic and demographic trends and increased financing and development costs have slowed permitting and construction starts to a crawl. Through December 2024, City of Portland permit applications for buildings of 5+ units are down 66%, the lowest since 2010.
Multifamily Completions
Past 12 Months
Single Family
Permits
Multifamily Permits
(5+ Units)
Median Single
Family Price
Completions / Net Absorption
Metro area permits for buildings of 5+ units dropped 44% from 2023 to 2024. This slowdown suggests that while demand will persist, the rate of new supply entering the market is falling significantly.
Units by Submarket Delivering in 2025
Units Under
Construction
Units UC Delivering
in the Next 4 Quarters
| Submarket | Units Under Construction | % of Total UC | 12 Month Deliveries |
|---|---|---|---|
| Aloha | 417 | 12.9% | 469 |
| Beaverton | 312 | 9.6% | 310 |
| Central Northeast | 0 | 0.0% | 26 |
| Clackamas County | 0 | 0.0% | 0 |
| Clark County | 0 | 0.0% | 0 |
| Columbia County | 0 | 0.0% | 0 |
| Damascus | 0 | 0.0% | 193 |
| Downtown Portland | 0 | 0.0% | 134 |
| East Portland | 15 | 0.5% | 72 |
| Hillsboro | 594 | 18.3% | 592 |
| Lake Oswego | 0 | 0.0% | 158 |
| North Portland | 0 | 0.0% | 0 |
| Northeast Portland | 247 | 7.6% | 314 |
| Northwest Portland | 341 | 10.5% | 340 |
| Oregon City | 15 | 0.5% | 216 |
| Outlying Washington County | 0 | 0.0% | 0 |
| Sherwood / Tualatin | 0 | 0.0% | 0 |
| Skamania County | 0 | 0.0% | 0 |
| Southeast Portland | 291 | 9.0% | 986 |
| Southwest Portland | 0 | 0.0% | 384 |
| Tigard | 0 | 0.0% | 191 |
| Troutdale / Gresham | 25 | 0.8% | 622 |
| Vancouver | 986 | 30.4% | 1,395 |
| Wilsonville | 0 | 0.0% | 100 |
| Yamhill County | 0 | 0.0% | 145 |
Multifamily Sales
Portland metro area multifamily sales volume jumped to $1.5 billion in 2024, off the 2023 low but still below the 10-year average of $2.3 billion. For well-located Class-A and Class-B properties, cap rates are in the lower 5 to lower 6% range. Transaction activity is still below the early 2022 market peak of $4.6 billion.
Portland's multifamily market is likely to do well in the long term despite the recent dip in transactions due to the following conditions:
- The continual demand for affordable housing
- A shortage of housing supply
- Local government reluctance to expand the Urban Growth Boundary
- The high cost of homeownership
- An return to population growth in the state and metro areas.
These factors are expected to support the market's stability and sustained growth in the years ahead.
YTD 12 Mo. Transaction Volume
12 Mo. Change
12 Month Market Price/Unit
Annual Price Change
Average Sales PPU / Cap Rate
Team
Greg Frick
Founding Partner
Cody Hagerman
Founding Partner
Rob Marton
Partner
Tyler Johnson
Partner
Jack Stephens
Partner
Lee Fehrenbacher
Broker
Adam Smith
Broker
Todd Tully
Broker
William Thompson
Broker
Yuriy Chubok
Broker