Golden Age of Multifamily for Portland Investors?

Why do I think we may be entering a new “Golden Age of Multifamily” in Portland?  Maybe we aren’t there yet, but the fundamentals are changing to create it.

Nationally the peak of homeownership spiked at around 69.2% in 2004-2005…the balance was primarily renters.  Now the national rate for homeownership has dropped to about 65.4%.  With interest rates at all time lows, why isn’t there a flood of buyers?  Many don’t have high enough credit scores, but easing underwriting guidelines weaken that argument.  The truth is that more and more of the prime candidates for first time buyership are choosing to rent even though buying is within their means.  This is not merely anecdotal…the hard data shows the shift.  Remember, a 4.2% discount isn’t much of a sale. Being 4.2% older isn’t that big of deal.  But 4.2% of a 312,000,000 person country changing where they live is huge.  That’s over 10,000,000 people.

“The decline in homeownership rates is really a correction of the housing bubble,” said James W. Hughes, dean of the Bloustein School of Planning and Public Policy at Rutgers University, in reference to a new census report that found homeownership nationwide had fallen to a 15-year low of 65.4 percent, versus a high of 69.2 percent in 2004. “There were many people who shouldn’t have been homeowners, and now they’re not going to be.”

 

 

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