"This lengthy softening of occupancy is probably related to ongoing unemployment problems and negative job growth in the area," states the report. "With an economy that was once propelled by high tech industry, Portland shows lingering weakness, and many analysts predict that when national recovery comes, Portland will lag behind."

Rents are a similar story: Despite the average rent for an apartment in Greater Portland dipping by $3 in the first quarter--moving from $748 in December to $745 at the end of March--rents over the past year have been essentially flat. Overall rent growth in the past year has been just 0.5%, though studio rents have risen 7.7% to $586 a month over the last year and rents for one-bedroom townhouses have jumped 5.4% to $921 a month, according to the report.

The good news is there has been self discipline on the part of lenders and investors, as development in Portland has slowed to match demand. Nearly half of the Portland region's rental housing stock was built in the 1990s, but it has since slowed way down. Development in the year 2000 was half that of any of the previous five years, yet still more than combined total from the past two years.