Oregonian: “Oregon’s Economy is Sturdier Than Ever”

The Sunday Oregonian’s Business section contained this headline, so of course I had to crack it open and give it a read. For those of you who may be somewhat new to my website and my philosophies, I have long advocated that “as goes the local economy, so goes the local housing market”. So, of course this headline was of particular interest to me.

Basically, the author (Richard Read) states that “Oregon’s economy is much better poised to weather a recession than in decades past”. Additionally, he adds, “Industrial variety – putting your eggs in as many baskets as possible – helps steel a state against the harshest downturns.” Art Ayre, a state employment economist in Salem, says that on a diversity scale of 0 to 1, Oregon ranks .76 (Where a value of 1 represents a fully diversified economy). Ayre further states that “the most diversified states are probably up at .85 at most”, making Oregon’s local economy one of the strongest in the nation.

Oregon’s economy has not always been this recession-proof, however. In the 1970′s and 1980′s, Oregon’s diversity indicator hovered between .4 and .5. This is why the housing crisis of the 1980′s was able to take such a bite out of our personal net worth and drag the economy into a protracted recession.

So, this article was particularly uplifting for me because as we look around and observe the nature of the U.S. economy and listen to the doomsayers, we can see that locally we are still in great shape. In fact, the Portland-Beaverton-Vancouver Metropolitan Statistical Area is one of three large MSA’s in the U.S. that are still appreciating (6.1% in the 12 months prior to January!) which is hardly something you can say about luxury real estate in places like Scottsdale. So this is why I believe that local economic variables more closely dictate what will happen to any geographic housing market. A strong economy brings jobs, and jobs bring wages, which in turn bring homeownership.

Questions, comments, rantings or ravings? Please feel free to write me at greg@portlandmortgagebroker.net or log in to create a reply.