LOCAL MARKET TRENDS IMPACTING AFFORDABLE HOUSING Portland-Vancouver Metropolitan Area Jerry Johnson Principal Johnson Reid, LLC
THE GREAT RECESSION
CURRENT RECESSION RELATIVE TO SIMILAR FINANCIAL CRISIS RECESSIONS
EMPLOYED POPULATION RATIO Ages Years
PART TIME EMPLOYMENT
LONG TERM UNEMPLOYED
UNEMPLOYED SHIFTING TO DISABLED
FAMILY INCOME TRENDS BY QUINTILE Family Income Down Net Worth Down 40% from 2007
EMPLOYMENT TRENDS BY SECTOR Portland Metro Area – OLMIS and Johnson Reid
EMPLOYMENT TRENDS BY SECTOR Portland Metro Area – OLMIS and Johnson Reid
GENERAL MARKET TRENDS REAL ESTATE MARKETS ARE CYCLICAL, NOT LINEAR
HOMEOWNERSHIP RATE National Trends
PRICE TO RENT RATIO National Trends
CASE SHILLER HOME PRICE INDEX TRENDS
POPULATION GROWTH BY TYPE
MAJOR DEMOGRAPHIC SHIFTS AGING BABY BOOMERS –Less affluent than expected –Lost Equity/Negative Positions YOUNG BABY BOOMERS –Changing retirement plans –Kids later, high income demands CHILDREN OF BABY BOOMERS –Generation Y, Millennials, Echo Boom –It’s all about them
RESIDENTIAL IMPACTS OF DEMOGRAPHIC SHIFTS INCREASED INTEREST IN HIGHLY AMENITIZED LOCATIONS –Willingness to swap space and price for amenities –Urban amenities with a practical impact VALUE ADDED STRATEGY IN PRIME LOCATIONS –Small units carefully sited –No parking?
RENTAL APARTMENT MARKET TRENDS Portland Metro Area
DISTRIBUTION OF PORTLAND METRO RENTAL APARTMENT PIPELINE
PIPELINE AS A PERCENT OF CURRENT BASE
HOUSING MARKET DYNAMICS DEMAND INCREASING –Losses to tenure split ending –Rising rental pricing –Continued low interest rates PIPELINE DRY –Very little new construction –Lot supply limited –Pricing must rise to replacement cost
LOCAL RENTAL APARTMENTS NO LONGER A CAN’T MISS MARKET –Production Cycle Well Underway –Attention Needs to be Paid to Pipeline –Infill, Understand Micro Markets –Quality Locations –Urban Amenity Profile –“Sustainable Competitive Position” DEATH OF SUBURBS OVERSOLD