Thursday, June 6, 2013

Portland Center for Real Estate Quarterly Report, Spring Issue

In case you missed the PSU Center for Real Estate Annual Conference, here is the link to the presentations by keynote speakers Blake Eagle and Hessam Nadji:

http://www.pdx.edu/realestate/center-events

I would also like to announce the Spring, 2013 issue of the PSU Center for Real Estate Quarterly Report, produced with the assistance of the Oregon Association of Realtors. You can find the latest issue at the Center's website:

http://www.pdx.edu/realestate/center-for-real-estate-quarterly

From that web page, you can download each individual article or the entire issue. We have also indexed all the articles in The Quarterly Report back to 2007.

Our feature article is a review (PDF) of public private partnerships by Attorney Michael Silvey of Lane Powell. Silvey discusses some of the advantages and pitfalls of a public-private partnership, using his experience with the development of the Rose Garden in Portland and the Seahawks' Stadium in Seattle.

In our single family housing report, RMLS student fellow Evan Abramowitz reports continued rises in housing prices and sales volume, both in Portland and nationally. At a national level, home prices are up 10.3% over the past 12 months, according to the National Association of Realtors. Using RMLS data, the median housing price in the Portland region reached $291,000 in Q1, 2013, a 26% increase over Q1, 2012. Using a similar time period, the Case-Shiller Repeat Sales Index found a price rise of 8.3%, which suggests increasing sales of higher quality homes in recent months. The revival of prices in the Portland region has been accompanied by a burst of new construction activity and sales activity from one year ago, although about half the level as during the boom period of 2005-07.

Outside of the three-county Portland area, Abramowitz finds sharp increases in housing prices in all the major markets in the state and region, with the following median levels: Portland area, $291,000, Vancouver suburbs, $258,800; Bend, $250,000, Benton County, $250,000; City of Vancouver, $228,000; Eugene-Springfield, $192,000; Redmond, $162,000; and Salem $149,900.

In the multi-family housing report, Abramowitz reports apartment rents have been increasing across the nation by an average of 3.5%. The Portland-area apartment market remains one of the tightest in the United States, with a vacancy rate of 3.6%. At the same time, Abramowitz quotes Portland apartment appraiser, Mark Barry, that the increase in apartment construction is likely to put the local market in balance in 2014 and 2015, moderating the rent increases.

In our commercial market report, OAR Student Fellow George McCleary finds that the improving economic conditions in the last quarter have led to lower vacancies and some rent growth. Unemployment has fallen from a 2009 peak of 11.1% to 8.0% today. Major office leases were signed this quarter by financial firms, technology firms, and business services firms throughout the region.

However, as he reported last quarter, the vacancy rates in the CBD have been rising while those in suburban markets have been tightening. Portland's CBD vacancy rate of 8.7% remains quite low, but it's following closely by Airport Way, 10.2%, the Lloyd District, 11.7%, and Sunset Corridor, 12.5%. The rate for the Sunset Corridor is a major decline from 15.9% last quarter, reflecting new activity at Intel, Nike, and related firms. Much higher vacancy rates persist in Kruse Way, 19.6% and the Hwy. 217 Corridor, 17.2%.

I hope you enjoy this latest issue of the Center for Real Estate Quarterly Report. I would like to thank the Oregon Association of Realtors (OAR) for their continued support of the Center and the publication of The Quarterly Report. As usual, we welcome your feedback on the articles as well as your suggestions for future articles.