"The Portland-Vancouver apartment market has experienced some softening due to the recent economic slowdown, but the long-term potential for the market is strong," notes Estes. "Not only has the Urban Growth Boundary limited construction activity in the region, but the downturn has caused further thinning of the construction pipeline."

By the end of 2002, the Portland-Vancouver region's employment base is forecast to have contracted by 1% on an annual average basis; according to the report. However, from mid-2002 through mid-2003, the report predicts employment growth will become positive, at approximately 1%--assuming a recovery in the high-tech manufacturing sector spurs economic growth throughout the region.

Vacancy will rise another 0.5 percentage points by year-end 2002 and is then expected to remain relatively stable through mid-2003, according to the report, resulting in a regional vacancy rate of 7.2%. Construction completions from mid-2002 to mid-2003 will increase over the previous year, when just 900 units were delivered, according to the report. Projects reaching completion over the next 12 months, however, will drain the pipeline almost entirely, according to the report.