Hi all,
Here are your key takeaways for the overall status of Commercial and Residential Real Estate Markets in the Portland area. Ultimately, real estate really tells the story of where and how we spend our time. Enjoy!
March Commercial Market Update
OFFICE
Prior to 2020, the direct office vacancy rate in the greater Portland area hovered around 11%. Throughout the Covid time period, vacancy rose rapidly as tenants decided not renew their leases, or contracted for less space than they had previously occupied. Currently the direct vacancy rate in the Portland area is at 23.2% and has not yet turned the corner.
Of course, the vacancy distribution is not equal and most areas fall into one of two categories: clear winners or clear losers.
Growth areas generally have vacancies around or less than 12%, including:
- Barbur Blvd – 10.7%
- Beaverton – 12.1%
- Clackamas – 9.1%
- Lake Oswego – 9.5%
- Outer Eastside – 10.8%
- Tigard – 6.5%
- Vancouver, WA – 8.3%
- West Hills – 7.6%
Areas in recession generally have vacancies around or more than 23%, including:
- Portland CBD – 26.3%
- Central Eastside – 21.0%
- Northwest – 29.6%
- Airport Way – 23.8%
- John’s Landing – 22.0%
- Kruse Way – 23.3%
- Tualatin – 23.6%
- Washington Square – 29%
RETAIL
Retail, on the other hand has had a moment during the Covid time period, with significant deliveries of new product and significant absorption. Current vacancy is around 4.5%. The market for restaurant space is particularly tight, with almost no second-generation restaurant spaces available across the entire market.
March Residential Market Update
Interest RatesInterest Rates look like they’re going to hold steady for a while and may decrease later in the year. It seems likely that the Fed will not reduce rates during its March meeting in 1 week. From Reuters:”The U.S. Federal Reserve will cut its key interest rate in June, according to a stronger majority of economists in the latest Reuters poll, as the central bank waits for more data to confirm whether inflation is headed convincingly toward its 2% target. “There is also some indication that public perception is becoming more accepting of current mortgage rates for what they are and continuing to transact anyway due to life circumstances – job changes, the need to upsize/downsize, etc.
INVENTORY
Inventory is higher than it was this time last year, but still low. People have been waiting to sell their homes, first due to Covid concerns, and now because they are concerned about finding a place to live when they do sell their home. Since we are still experiencing a strong seller’s market for anything under $1.2M, it makes sense for anyone who wants to move to buy first and then sell their current home. If equity is an issue, there are numerous bridge loan programs that are easy and effective.
SELLERS
Sellers who have a home that might need some updates may do well to sell sooner rather than later this year to get ahead of the inventory that will come on in spring and early summer. Motivated buyers will take what they can get.
BUYING
Buyers will have a lot more to choose from in the coming months. On some level, they will continue to have less competition due to stagnant interest rates keeping some would-be buyers out of the market, however pent up demand should keep prices high.
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| Dylan McNerney License: 201246674 (503) 454-6822 dylanm@windermere.com |
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Contact Us: Windermere Realty Trust – Lake Oswego 220 A Avenue, Suite 200 Lake Oswego, OR 97034 (503) 454-6822 View Website |
| Lake Oswego – 220 A Avenue |