Q3 • 2025

TMGMultifamily

MARKET PULSE

A Snapshot of the Pacific Northwest Multifamily Housing Market

The multifamily markets in these four regions are generally performing at a stable level, sharing common dynamics as outlined below. However, they are also facing headwinds that require careful consideration in operational management, with an emphasis on strategic marketing.

Stabilized properties—particularly workforce housing and modest-quality assets—are holding up better, while higher-rent and luxury properties are more vulnerable to competition from home ownership opportunities and elevated concessions.
On the positive side, most research suggests that supply growth has slowed, while lending and construction costs remain elevated. These factors point toward vacancy stabilization and moderate rent growth ahead.
Seasonal and time-frame headwinds (Q3/Q4), along with macro-economic factors such as layoffs and reduced mobility, are reducing tenant traffic and turnover. This impacts lease-up and increases reliance on renewals and retention.
Lease-up projects are struggling compared to stabilized assets: concessions are more prevalent, and lease-up absorption is slower, which is affecting overall rent growth. This pressure often filters into stabilized properties within the same locale.
Unit-type and product-type nuances are evident: one-bedrooms are showing higher vacancy than larger units, likely owing to younger demographics and more flexibility. Meanwhile, the build-to-rent (BTR) single-family rental (SFR) sector is beginning to exert more competitive pressure on Vancouver and Portland markets.

Vancouver, WA

Vancouver is demonstrating relative stability—though not without pressure. Vacancy at 7.4% is moderate, and rent growth is minimal; however, it remains higher than the other three markets.
The demand tailwind from in-migration, particularly from Portland, is a positive differentiator which supports demand beyond normal market churn.

Portland, OR

The Portland metro area is displaying a cautious, “wait-and-see” trend. Overall vacancy is 7.3%, and new supply has tapered, providing some stabilization. However, rent growth is slightly negative, reflecting soft absorption and concession-driven pricing strategies.
Performance is segmented by class: luxury (4–5 star) assets are experiencing the greatest pressure, while workforce and mid-tier housing (1–2 star) exhibits lower vacancy and comparatively stronger financial stability.

Salem, OR

Salem continues to perform steadily, with a vacancy rate of 5.5%—the lowest among the four markets—and rent growth comparable to Tri-Cities.
This market has absorbed a considerable number of units, especially over the past five years, and has still performed well.

Tri-Cities, WA
(Kennewick/Pasco/Richland)

Overall vacancy stands at 8.1%, appearing elevated at first glance. However, established properties not in lease-up are performing at closer to 5% vacancy, indicating that recently delivered assets are contributing disproportionately to softness.
Moderate rent growth and continued in-migration support a healthy long-term demand outlook, positioning the Tri-Cities market favorably for investors.

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VANCOUVERMultifamily

12 Mo. Delivered Units
1,511

12 Mo. Absorption Units
1,792

Vacancy Rate
7.4%

12 Mo. Asking Rent Growth
0.9%

Vancouver has 590 units in the construction pipeline across various stages of development. These projects will expand existing inventory by around 1.5%.
Gains in Vancouver have averaged 3.1% over the past five years, and reached a five-year low mark of -2.0% in late 2023 during a bout of intense supply additions across the submarket that met up with tepid leasing as inflation ran above historical norms.
Multifamily leasing in Vancouver has driven trailing 12 month absorption to 1,800 units, versus the five-year average annual rate of 1,500 units. Given continued upward pressure on population growth, absorption is now set up to significantly outpace supply over the remainder of 2025.

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PORTLANDMultifamily

12 Mo. Delivered Units
5,266

12 Mo. Absorption Units
5,826

Vacancy Rate
7.3%

12 Mo. Asking Rent Growth
-0.3%

Steady apartment leasing has driven absorption over the past 12 months to 5,800 units. This figure is below the 5- year high of 11,000 units, but well above the historical average annual figure of 3,200 units. The vacancy rate is hovering around 7.3%.
There are 3,000 units underway as of the third quarter of 2025, which will expand existing inventory by 1.2%. Net deliveries over the past 12 months total 6,300 units Based on absorption of 5,200 units over the same period, a slight supply overhang lingers, but Portland’s vacancy rate is already on a downward trajectory.
Portland’s construction pipeline of 2,000 units underway has retreated from the previous three-year high mark of 13,000 units reached in 22Q4.

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SALEMMultifamily

12 Mo. Delivered Units
558

12 Mo. Absorption Units
853

Vacancy Rate
5.5%

12 Mo. Asking Rent Growth
0.6%

Annual rent growth of 0.6% reflects the lowest performance mark over the past decade. Still, cumulative growth over the same period of 50.1% significantly outpaces the national performance of 33.5%.
Multifamily absorption in Salem equates to 850 units on a trailing 12-month basis, below its mid-2021 peak of 1,300 units, but ahead of the five-year average of 750 units.
There are currently 700 units underway in Salem that will expand total inventory by 2.2%. Apartment inventory has increased by approximately 27.1% over the past decade, with 6,700 units delivered during this period.

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TRI-CITIESMultifamily

12 Mo. Delivered Units
732

12 Mo. Absorption Units
664

Vacancy Rate
8.1%

12 Mo. Asking Rent Growth
0.6%

The Tri-Cities has seen solid growth, and new market- rate apartment communities started out strong but reduced traffic has made stabilization challenging. Over the past year, the inventory has changed by 730 units, while renter households absorbed 660 units.
As of the fourth quarter of 2025, Kennewick-Richland‘s vacancy rate stands at 8.1%. That compares to a 10- year average of 6.9%. The vacancy rate across the 4 & 5 Star quality segment stands at 9.4%, while it is 9.5% for3 Star and 4.1% for the more affordable 1 & 2 Star tier.
Rent growth has been modest, and the rate of growth has been decelerating since 2021. Rents have changed by 0.6% year over year in Kennewick-Richland, compared to a change of 0.6% nationally.

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The TMG Multifamily Quarterly Market Pulse is brought to you by TMG Multifamily, an AMO accredited property management company providing a full suite of management services for existing apartments, new developments, lease-ups, and mixed-use properties. TMG partners with investors to proactively identify strategic opportunities and maximize their return on investment. Locally owned and regionally focused, TMG has been helping clients reach their financial goals since 1985.