Portland is clawing back from the dead in the eyes of the nation—or at least in the eyes of real estate pros.
Each year, the Urban Land Institute and national accounting and consulting firm PwC conduct a detailed analysis of the country’s biggest real estate markets and publish a closely watched report called Emerging Trends in Real Estate.
The forecast for 2022, published Oct. 15, drew on 1,200 surveys and 930 interviews of developers, brokers and investors across the country. Portland’s rating in the category of “Overall Real Estate Prospects,” which plummeted last year (see chart), bounced back this year. Portland had declined from third-most desirable market in the nation to 66th out of 80 American cities. This year, Portland climbed back into the top 50 markets.
Say it loud: We’re No. 49!
For the second year in a row, the Sun Belt triumvirate of Austin, Nashville and Raleigh-Durham held the top three spots. Like Portland, Seattle saw its fortunes rise, but more strongly: It went from 34th to ninth.
“For all the bad press Portland has received, we still have net immigration and housing prices are moving up fast like other parts of the country,” says Tom Potiowsky, a former state economist and now senior adviser at the Northwest Economic Research Center. “But it will take some major changes and more time before Portland is once again a ‘darling.’”
A different report focused entirely on the local market released earlier this month by the firm Jones Lang LaSalle found reasons for cautious optimism: Portland rents remain high—meaning people want to be here—and although vacancies are high as well, there’s relatively little new office construction in Portland. “Solace can be found,” the report opined.
One jarring note: Although JLL also paints a picture of a market trending positively, the market in Lake Oswego is positively scorching, driving prices there higher than in downtown Portland for the first time since 2015. The price per square foot in Portland’s central business district is $36.82; the price in Lake Oswego is $37.43.
“The bullish rate hikes,” JLL wrote, “are being driven by increasing demand from tenants in the urban core looking to relocate.”