Now that the dust has settled, how did the Portland Apartment market fare in 2017? There are a few ways of approaching this question.
- 2017 Sales Volume - $1.7 billion - Portland apartment sales volume decreased by 48% from 2016, which sounds a bit frightening on the surface. However, 2017 will be the third largest year ever for apartment sales volume.
- 2017 Transactions - 192 Sales - The number of Portland apartment transactions was down 27% from 2016. Despite the sharp decrease, 2017 was one of the top 10 busiest years ever.
- Median Price Per Unit - $149,000 - On a per unit basis, values haven't skipped a beat. On a year over year basis, values were up 25% per unit, which is quite staggering.
- Median Price Per Sq. Ft. - $164 - When considering the median price per Sq. Ft., values were up 26% from 2016. Another staggering increase.
- Overall Capitalization Rates - 5.45% - Cap rates were flat from 2016. This would suggest little change in values if the net income were flat. However, income and net income has generally been increasing.
Despite sales volume and the number of transactions being down from previous years (which were all-time highs), the Portland apartment market is showing little signs of weakness. Values were up across all sub-markets and investor demand remains high.
However, some concerns are out there with regards to increasing vacancies, a slow down in rental rate increases, a large volume of new units hitting the market in 2018 and 2019. I will address these issues in a future post.