Oregon State Economist Josh Lehner: "Declining Job Vacancies is Good News"

In recent quarters, Oregon has been among the many states registering a higher number of job-seekers than employment opportunities. This makes the recent decrease in job openings a positive sign for the state's recovery, Economist Josh Lehner writes. 

The ratio of job openings per unemployed Oregonian reached 1.6 in June, down from 1.9 in March. While this is still an imbalance and indicative of a very tight labor market, Lehner writes, "movement toward better balance is still movement toward better balance and a soft landing."

Read the full post at OregonEconomicAnalysis.com.

National Rent Growth Slows & Tacoma Rents Remain Flat in August

Apartment List reports rent growth has slowed nationwide, increasing just 0.5% in August, down from over 1% in July. Rents in most regions are still increasing faster than they did pre-pandemic but much slower than last year.

Some highlights from the Tacoma September Rent Report: 

• Rents in Tacoma held steady month-over-month in August. Month-over-month growth in Tacoma ranks #76 among the nation's 100 largest cities.
• Year-over-year rent growth in Tacoma currently stands at 4%, compared to 19.8% at this time last year. Year-over-year growth in Tacoma ranks #87 among the nation's 100 largest cities. Rents in Tacoma are up by 25.6% since the start of the pandemic in March 2020.
• Median rents in Tacoma currently stand at $1,250 for a one-bedroom apartment and $1,596 for a two-bedroom.

Read the full Tacoma report at ApartmentList.com.

Report: Adjusting Expectations for Healthy but Modest Multifamily Activity Through Year-End

Though the multifamily market recorded strong investor demand nationwide in the first half of 2022, more
modest activity is expected through the rest of the year, according to the Midyear National Multifamily Outlook released last week by Northmarq. 

Investment activity in the second quarter was almost equal to the first three months of the year, despite economic volatility and increasing costs of capital.

“While there are many moving parts influencing multifamily markets across the country, the broad takeaway is that conditions are very strong and should remain healthy through the remainder of 2022,” said Trevor Koskovich, president of Northmarq Investment Sales. 

Read the full report at NorthMarq.com 

Washington Multifamily Marketwatch - Mark Melsness Interview

In this special edition, Mark Melsness of Spinnaker Property Management discusses the pitfalls of managing multifamily housing today in Washington State, specifically in the South Sound region. 

Check out this episode!

Rental Multifamily Construction Starts Surged in Q2

For-rent multifamily housing starts increased significantly in Q2 2022, the National Association of Home Builders (NAHB) reports. The quarterly total reached 142,000 units in the second quarter, the highest count for rental multifamily construction since Q2 1986.

This high level of rental units in the pipeline has kept the average new apartment size low, according to NAHB. In Q2 2022, the average square footage of multifamily construction starts declined to 1,057 square feet. 

Read more at EyeOnHousing.org.

HFO-TV: Monique Claiborne of Greater Portland, Inc. Discusses Portland's Perceived Challenges

 

On our most recent episode of HFO-TV, Monique Claiborne, president and CEO of Greater Portland, Inc. (GPI), joins us to discuss the ongoing efforts and impacts of their work to stimulate economic growth in the region and shares why she believes some of the challenges the metro faces are driven more by their discussion than by actual impact. 

Watch the full interview on our YouTube channel or our website, HFORE.com/videos.aspx.

Sold! 6 Units in McMinnville, OR

Congratulations to HFO broker Adam Smith and the rest of the HFO team on the sale of six-unit Granite Apartments in McMinnville, OR.

Migration out of Large Metro Areas Remains Above Pre-COVID Levels

Nationwide, net migration out of high-cost large metro areas remained well above pre-pandemic norms in Q2 2022, according to The Federal Reserve Bank of Cleveland. During each month of the second quarter, high-cost large metro areas lost approximately 13,400 people to lower-cost large metro areas, 10,000 people to midsized metro areas, and 14,900 people to small metro areas.

The Cleveland Fed released an update to its March report on migration out of large metro areas, providing second-quarter data that largely echoed the previous findings. 

"The patterns in the destinations of migrants were mostly unchanged [from Q1]. They continue to reflect migrants’ post-pandemic preference for lower-cost and less populous regions."

Portland has seen the highest portion of out-migration to lower-cost, large metro areas with populations greater than two million, with gross migration flows to such areas increasing 25.6% in the last four quarters. Though well above many others on the list following the same trend, the metro falls behind San Jose, California at 35.6%, Riverside, California at 34.6%, Los Angeles, California at 30%, and Seattle, Washington at 26.4%.

Fort Meyers, Florida, Sarasota, Florida, Stockton, California, Boise City, Idaho, and Las Vegas, Nevada topped the list of metro areas with the greatest net in-migration from high-cost, large metro areas as a percent of their workforce during the last four quarters.

Read the full report at ClevelandFed.org.

Study: Portland Ranks Near Bottom on List of Recovering Downtowns

The University of California Berkeley has published a study that finds Portland's downtown is the 60th-slowest to recover after the pandemic compared to 62 other larger cities, the Portland Tribune reports. 

Using two years of cell phone data, researchers recorded how many people were shopping and dining at downtown stores and restaurants. The study finds that Portland's recovery of 41% of foot traffic ranked lower than all other measured cities except Cleveland (36% recovered) and San Francisco (31% recovered). 

Read more at PamplinMedia.com.

U.S. Underproduced 3.8 Million Housing Units in 2019

A July report from ECONorthwest and national housing-focused nonprofit Up For Growth finds that the U.S. underproduced 3.8 million housing units in 2019.

The report has garnered significant national attention since its release. ECONorthwest and Up For Growth researchers highlight the severity of housing underproduction across the U.S. and consider the unique drivers of the lack of development, aiming to deliver "practical and tangible" solutions to advocates and policymakers. 

See below for some key findings and download the full report, Housing Underproduction™ in the U.S. 2022, at UpForGrowth.org.

• After the last housing crash in 2008, developers stopped building — for a decade.
  
  
• Underproduction needs to be broken down into several driving components: missing households, vacancy challenges, and uninhabitable units.
  
  
• Underproduction is surging, with some areas seeing more than 25x increases in their rates of underproduction from a decade ago.
  
  
• As of 2019, Oregon had the fourth-largest share of underproduction for total housing stock in the nation.
  
  
• Most metro areas in the study need to update their zoning rules to allow for more housing to be built quickly.
  
  

Read the full report at UpForGrowth.org.

Oregon Records More Deaths Than Births for First Time in History

State economist Josh Lehner published an update on Oregon's vital statistics through June 2022, reporting that for the first time in recorded history, there were more deaths in the state than there were births.

"In a 12-word summary of the implications: without stronger migration trends, Oregon’s economic growth could be slower than anticipated," Lehner writes. 

from OregonEconomicAnalysis.com

Though the number of deaths has declined in recent months and is back within the range of pre-pandemic expectations, births remain low. Thus far in 2022, Lehner notes, the state is on track to see the fewest total births since the mid- to late-1980s.

While the birth rate is expected to increase some in the years ahead, in the short term, the decline in the natural population increases Oregon's reliance on migration to grow the state's economy and labor force. 

Read the full post at OregonEconomicAnalysis.com.

Freddie Mac Midyear Multifamily Outlook: Despite Uncertainty, Solid Performance Expected in 2022

Freddie Mac expects multifamily growth will moderate through the rest of the year after holding strong in the first half of the year, Multifamily Dive reports. 

The government-sponsored mortgage lender published their Midyear Multifamily Outlook this month, predicting multifamily 2022 origination volume will contract to between $440 billion and $450 billion, down 8%-10% from 2021. 

Inflation and volatile Treasury rates are expected to be headwinds to growth. "The likelihood of a recession has risen from the first half of the year to the second, and rising interest rates have cut into multifamily volume as borrowers and investors avoid volatile environments," Multifamily Dive writes. 

However, Freddie Mac analysts say fundamentals will ultimately remain strong. "Despite increased uncertainty, the multifamily industry is positioned well, and we forecast solid performance for the year," the report reads. 

Read the full Freddie Mac report at FreddieMac.com and Multifamily Dive's analysis at MultifamilyDive.com. 

Washington Multifamily Marketwatch: 1031 Exchange Special

Toija Beutler, manager of Beutler Exchange Group, provides the latest on 1031 exchanges, along with information on reverse and improvement exchanges. 

Check out this episode!

U.S. Adds 528K Jobs in July; Talk of Recession is "Premature"

The U.S. economy added 528,000 non-farm jobs in July, a sharp increase from the 398,000 jobs added in June. 

Yahoo! Finance compared the key numbers to economist estimates compiled by Bloomberg:

• Non-farm payrolls: +528,000 vs. +250,000
• Unemployment rate: 3.5% vs. 3.6%
• Average hourly earnings, month-over-month: +0.5% vs. +0.4%
• Average hourly earnings, year-over-year: +5.2% vs. +4.9%

Yahoo! quotes Renaissance Macro Research's Head of U.S. Economics Neil Dutta:

"The July employment report was an absolute knock-out, a major upside surprise relative to my expectations, and indeed much of the labor market data released up to this point. Talk of recession and a monetary policy pivot is premature.

That said, this jobs report is consistent with an inflationary boom. The Fed has a lot more work to do and in an odd way, that the Fed needs to get more aggressive in pushing up rates, makes the hard-landing scenario more likely."

Read more at Finance.Yahoo.com

Workforce Study Blames High Cost of Housing for Oregon Applicant Shortage

Oregon employers are struggling to fill jobs in large part due to the state's high cost of housing, a new report finds. 

The Oregonian reports that ECONorthwest has completed its third workforce study for the Oregon Workforce, Talent Development Board and the Higher Education Coordinating Commission. The report finds that while employers have increased salaries an average of 17% in an effort to attract applicants, after accounting for higher costs due to inflation, the actual wage increase is closer to 5%. With high housing and gas costs, commuting has become less feasible for potential job seekers in the state. 

Read more at OregonLive.com

Crane Count Indicates Developers Slow to Return to Portland's Urban Core

The Portland Business Journal reports the RLB Crane Index from Rider Levett Bucknall counted only a dozen cranes in downtown Portland in February, down from 28 at the same time in 2020 (just before the pandemic began). 

New York, San Francisco, and Las Vegas also saw declines, while Seattle, Los Angeles, and Chicago reportedly saw increases.

Read more at BizJournals.com

Moody's Analytics: Limited Multifamily Supply Should Sustain Industry in a Recession

A new Moody's Analytics report indicates that limited apartment construction should balance lower demand if the country faces a recession. 

"While many single-family markets will likely see small to moderate prices decline in this situation, multifamily’s positive performance should hold up relatively longer, as in previous downturns," Moody's analysts write. 

Read more at GlobeSt.com