Despite the glut of condos on the market, Portland’s multifamily vacancy rate is relatively low compared to other markets in the U.S. According to a report issued by commercial real estate tracker CoStar, the national vacancy rate for this type of property was 10.6% at the end of the second quarter. This is a jump from a year ago and the first quarter of 2009 when the rate was 10% and 10.1% respectively. Urban areas increased vacancy by .8% from a year ago while suburban areas remained around 10%.
Rental vacancy is running highest in the South (13.8%) and lowest in the North (7.1%) overall. The West saw the most significant increase from 2Q 08 while the other regions in the U.S. remained mostly flat.
Portland is the anomaly in the West with the lowest multifamily vacancy rate among the major metropolitan statistical areas (MSA) in the U.S. At 2.9%, Portland’s vacancy is 2.1% less than the next lowest city, Louisville, KY. This is a bit unexpected given the large number of projects delivered in the last two years, at the onset of the economic downturn.
Often times, Portland experiences a latent effect and the true impact of negative and positive moves in the economy aren’t fully felt for another six months. Considering the Street of Dreams had a building on the tour go into foreclosure just as the show began, it is reasonable to expect that this vacancy rate will rise. How much though, remains uncertain.
Five Most Vacant MSAs – multifamily
Memphis, TN – 25.8%
Birmingham, AL – 22.7%
Phoenix, AZ – 19.3%
New Orleans, LA – 18.9%
Atlanta, GA – 18.4%
Five Lowest Vacant MSA – multifamily
Alburquerque, NM – 5.6%
Boston, MA – 5.6%
Hartford, CT – 5.6%
Louisville, KY – 5.0%
Portland, OR – 2.9%
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