"Unlike the last high-tech slowdown in the late 1990s, which impacted Portland so severely, the local apartment market has very little excess supply on hand," says Jack Estes, regional manager in the firm's Portland office. "A limited number of projects are expected to reach completion over the next 12 months, further cushioning the impact of the recession. Also unlike the previous confined downturn in the semiconductor industry, the entire nation has entered into a recession, which makes it unlikely that the newly unemployed will leave the region to find job opportunities elsewhere. These factors will keep the Portland apartment market stable."

During 2002, approximately 1,200 units will come online, says M&M, an 8% reduction from 2001's 1,300 units. By comparison, during the 1990s, the region averaged more than 4,000 new units annually. Similar to 2001, the limited amount of new apartment supply entering Portland in 2002 will keep the market on track, despite significant job losses across the region, states the report.

In 2001, despite the declining job growth, the report found vacancy declined by only 0.4 percentage points to 5.8%, as demand outpaced new supply. Over the next year, reduced construction completions will allow vacancy to come in just 0.7 percentage points above the current rate of 5.8%, despite a continued deceleration in job growth, according to the report. Although vacancy should rise less than a percentage point, vacancies will shift within the market, states the report. Complexes with above-average rents that are implementing significant increases will experience higher vacancies, according to the report.