Maybe The Sky Is Not Falling

Portland State University Center for Real Estate recently completed its 1st Quarter 2009 real estate market analysis.

This very well written and researched report is an extensive review of the major property types primarily focused on the Portland MSA, but also other cities throughout the region. Shown below are some of the highlights:

Overall Real Estate Market

• Grubb & Ellis ranks Portland in the top 10 cities out of 60 for current real estate investment.

Office

• Portland’s office market is ranked second in the nation behind Washington, DC, for market strength (forecast through 2013).
• The overall office vacancy rate for Portland is 12.2%, with downtown CBD at a surprisingly low 7.6%.
• Overall there was net absorption of office space for the Portland market for 2008.

Industrial

• The overall vacancy rate for industrial properties was at 6.6% at the end of the Q4, 2008.
• New construction outpaced absorption for the first time since 2003 – 2.7 million SF of new construction, as compared to 1.3 million SF absorbed.
• Asking rental rates are holding steady.

Multifamily

• Norris, Beggs & Simpson reports a 4.7% vacancy rate for apartments.
• Apartments rents have increased about 6% annually for the past 3 years.
• Capitalization rates have leveled and are predicted to rise in 2009.

Single-Family Housing

• Although the median sales price of detached homes has declined by 8% in 2008, they are still 16% above their 2005 pre-bubble values.


• The number of sales has declined 41.0% from the previous year.

In essence, real estate in the Portland MSA seems to be doing better (or lagging behind in loss) than most other urban centers.

This brings a wary hope to those of us working here on both the commercial and residential side of the industry. Cautious optimism is the name of the game and all of us can do with a dose of that.

On a lighter note, we’ve found the perfect YouTube video for our days and times. In a masterful voice-over of a German-language film (“Der Untergang”, “Downfall”), watch Hitler (now the dupe of a real estate broker and NAR) lose his home, his Camaro, and his flatscreen TV.