Optimistic 2025-2026: Multifamily Market Set for Rebound in Oregon and Washington

As we look ahead to 2025 and 2026, multifamily brokers and advisors at HFO Investment Real Estate are optimistic about an economic rebound in Oregon and Southwest Washington.

Recent trends and forecasts by third-party data analysts such as CoStar, Yardi Matrix, and RealPage indicate an anticipated return to historically average rent increases approximating 3.5%. This data is further supported by a significant drop in the number of new housing permit applications, a steady increase in population across Washington State, with the slowing of a post-COVID population decline in Oregon.

Economic Growth and Population Trends Oregon and Washington face dynamic demographic shifts, with population growth expected to continue as people are drawn to the region's vibrant job markets and quality of life. According to the U.S. Census Bureau, Oregon's population grew to around 4.2 million this year, and state forecasters estimate it will grow to 4.4 million by 2028. The increase is expected mainly due to in-migration resulting from robust job creation in technology, healthcare, and green industries. Likewise, Washington's population is projected to grow steadily from 8 million today to 8.4 million in 2028, bolstered by its diverse economy and attractive living conditions. The increase of 600,000 souls in Oregon and Washington in just four years will fuel significant demand for multifamily housing.

Market Resilience and Rental Demand The multifamily market in both states has shown resilience in the face of recent economic uncertainties. Data from the Federal Reserve Bank of San Francisco highlights a cautiously optimistic economic outlook, supported by the current decline in inflation rates and stable job growth. As the economy stabilizes, we anticipate that apartment demand will outstrip supply in key markets, enabling property owners to increase rents as vacancy rates decrease.

How investors and owners can take several proactive steps to maximize their asset’s earning potential during this recovery phase:

1. Conduct In-Depth Market Research: HFO’s brokers and researchers can help you understand local market conditions, current rental rates, and emerging neighborhoods. This knowledge can help you make informed decisions about pricing and potential future investments.
2. Enhance Property Value: To attract renters, consider upgrading amenities and making energy-efficient renovations. For instance, investing in shared community spaces and taking advantage of multifamily energy incentives and rebates, such as those for EV Chargers and heat pumps, can significantly enhance property appeal and increase your ability to attract and retain tenants.
3. Building Relationships with Local Governments: Through your phone calls with brokers and by signing up for email alerts from HFO, we will inform you of the critical times to engage with local authorities on important housing policies, infrastructure projects, and development incentives that may impact your investments. Additionally, building partnerships with your government leaders and staff and through housing associations that represent your interests can provide you with insights and opportunities for collaboration that enhance property value, empowering you to make a difference in your local community. Portland-area developers should be aware that the City of Portland has set a specific goal of partnering with apartment developers in the next five years to reach a lofty goal of 120,000 new units by 2045.
4. Diversify Property Portfolios: HFO’s brokers can help you explore investments in various asset classes within multifamily real estate. Diversification can mitigate risk and exploit emerging trends across cities, neighborhoods, and property classes.

In conclusion, the outlook for multifamily real estate in Oregon and Washington is not just promising, but also hopeful and optimistic. With positive population growth and economic outlook, property owners who strategize effectively can capitalize on the anticipated resurgence in rental demand in future years. By staying informed and responsive to local market trends, owners can position themselves for ongoing success in a revitalized Multifamily landscape.