PORTLAND, Ore. (KOIN) – Occupancy in Portland’s multi-family homes dropped from Q1 of 2022 to Q1 2023, according to real estate market figures from CBRE, a global commercial real estate services and investment company. 

In Q1 of 2023, the occupancy rate was 94.7%, down from 97.2% in Q1 of 2022. CBRE said this is the greatest year-over-year drop in occupancy in the area in the past 9 years.

Rental rates in Q1 of 2023 were up 5.5% year over year, but dropped 0.5% from Q4 of 2022, according to the report

In Q1 of 2023, the average asking rate for monthly rent for a multi-family unit in the Portland metro area was $1,751. 

Real estate researchers at CBRE said parts of the Southwest Portland metro area, including Tigard, Lake Oswego, Tualatin and Wilsonville, saw the strongest rent growth year over year at more than 7%. 

The data shows that sales volume in Q1 of 2023 in the Portland area is down 62.5% from the year before and below the five-year quarterly average of $579.8 million. 

The confirmed sales volume only totaled $193.3 million, CBRE said, but these local declines are consistent with regional and national trends. 

More multi-family housing is being built throughout the metro area, according to the report. The total number of multi-family units completed in Q2 of 2022, Q3 of 2022, Q4 of 2022 and Q1 of 2023 was 5,645, according to the report. This is up 13% from the 4,992 units completed in the prior four quarters. 

However, the 716 units completed in Q1 of 2023 are down 24.7% from the 951 units completed in the Q1 of 2022.

“Future starts and completions are expected to decline due to rising construction costs coupled with interest rate increases that reduce feasibility in most cases,” CBRE stated in its report. 

According to CBRE’s data, in Q1 of 2023, the part of the Portland metro area with the highest vacancy rate was Central Portland with a vacancy rate of 7.5%, followed by East Portland at 6.2% and Northwest Portland at 5.9%. 

Within the metro area, the Lake Oswego/Tualatin/Wilsonville areas have the highest average rent at $1,916 per unit. The area with the lowest average rent is Gresham/Far East Portland at $1,582.