fbpx

California V. Oregon Real Estate

I had wanted to post this as a reply to comments on Portland Real Estate Market Today vs 2006 but it won’t let me post the table as a comment.

I can see the stock broker crying in his milk now. “I bought a $400,000 house
five years ago. Last year it was worth $1 million dollars. Today, it’s only
worth $960,000. CURSES!”

The first three columns of the table below are from the
Office of Federal Housing Enterprise
Oversight
.  They show the House Price Index for California and Oregon by
quarter from 1976.  The second set of figures is my math on the value of
$10,000 invested in 1976 based on the appreciation numbers provided.

One of the key points of interest for me is from 1999, since then, California only had two
quarters of single digit appreciation, Oregon didn’t hit double digit apprciation until the third quarter of 2004.  That’s why Oregon has had a much softer landing.

Click keep reading to see where your $10,000 would have gone. Moral of the story? Real estate is a long term investment and has been a good one over the last thirty years. Choose the wrong time to “day trade” real estate and your gonna get bit.

CA OR
Year Qtr CA OR  $10,000  $10,000
1976 1 14.7 12.16 10368 10304
1976 2 17.2 11.05 10813 10589
1976 3 20.6 13.29 11370 10940
1976 4 20.64 19.36 11957 11470
1977 1 21.13 17.83 12589 11981
1977 2 24.92 21.54 13373 12626
1977 3 26.64 22.47 14263 13336
1977 4 26.6 22.28 15212 14079
1978 1 26.19 18.78 16208 14740
1978 2 20.36 21.87 17033 15545
1978 3 15.71 19.35 17702 16297
1978 4 15.87 17.39 18404 17006
1979 1 15.37 20.44 19111 17875
1979 2 16.54 13.79 19902 18491
1979 3 18.17 11.24 20806 19011
1979 4 17.68 9.21 21725 19449
1980 1 17.95 3.55 22700 19621
1980 2 16.12 2.53 23615 19745
1980 3 14.31 7.71 24460 20126
1980 4 12.5 1.88 25224 20220
1981 1 10.47 -1.56 25884 20142
1981 2 9.52 -0.69 26500 20107
1981 3 9.05 -10.92 27100 19558
1981 4 8.48 -9.15 27675 19110
1982 1 4.27 3.17 27970 19262
1982 2 2.82 -4.29 28167 19055
1982 3 0.44 2.55 28198 19177
1982 4 -0.81 8.93 28141 19605
1983 1 2.02 -2.35 28283 19490
1983 2 1.37 7.21 28380 19841
1983 3 0.78 3.43 28435 20011
1983 4 0.99 -2.33 28506 19895
1984 1 1.85 -0.12 28638 19889
1984 2 2.38 -2.67 28808 19756
1984 3 3.74 -3.33 29077 19591
1984 4 4.32 1.5 29391 19665
1985 1 4.12 -0.39 29694 19646
1985 2 5.09 0.03 30072 19647
1985 3 6.14 0.5 30534 19672
1985 4 6.53 -3.06 31032 19521
1986 1 6.32 0.28 31522 19535
1986 2 6.84 1.41 32061 19604
1986 3 6.73 2.69 32601 19736
1986 4 8 1.1 33253 19790
1987 1 9.43 1.88 34037 19883
1987 2 9.96 1.44 34884 19955
1987 3 10.92 -0.33 35837 19938
1987 4 11.4 0.85 36858 19980
1988 1 12.58 0.46 38017 20003
1988 2 14.42 1.24 39388 20065
1988 3 16.21 5.77 40984 20355
1988 4 19.26 7.28 42957 20725
1989 1 20.31 7.45 45138 21111
1989 2 21.34 8.81 47547 21576
1989 3 22.59 8.35 50232 22027
1989 4 19.69 10.14 52704 22585
1990 1 15.8 11.96 54786 23260
1990 2 10.75 14.61 56259 24110
1990 3 5.57 15.85 57042 25065
1990 4 1.83 15.07 57303 26010
1991 1 0.52 12.9 57377 26848
1991 2 -0.54 9.91 57300 27514
1991 3 -1.34 7.48 57108 28028
1991 4 0.01 8 57109 28589
1992 1 -0.47 8.34 57042 29185
1992 2 -0.83 7.4 56924 29725
1992 3 -1.02 8.22 56779 30336
1992 4 -2.67 7.84 56400 30930
1993 1 -3.64 7.21 55887 31488
1993 2 -3.45 7.91 55405 32110
1993 3 -4.09 7.91 54838 32745
1993 4 -3.74 8.12 54325 33410
1994 1 -3.22 9.35 53888 34191
1994 2 -4.76 10.91 53247 35124
1994 3 -5.39 11.21 52529 36108
1994 4 -6.27 10.74 51706 37077
1995 1 -5.96 9.86 50935 37991
1995 2 -2.71 8.99 50590 38845
1995 3 -0.07 8.77 50582 39697
1995 4 1.32 8.91 50748 40581
1996 1 2.03 9.18 51006 41512
1996 2 -0.29 7.76 50969 42318
1996 3 -1.71 6.89 50751 43047
1996 4 -1.04 6.77 50619 43775
1997 1 -0.51 6.35 50555 44470
1997 2 1.75 6.06 50776 45144
1997 3 4.09 6.62 51295 45891
1997 4 5.36 6.08 51982 46589
1998 1 7.06 5.91 52900 47277
1998 2 8.32 5.57 54000 47935
1998 3 8.93 4.41 55206 48464
1998 4 9.05 4.21 56455 48974
1999 1 8.37 3.2 57636 49366
1999 2 7.87 3.03 58770 49740
1999 3 7.38 2.14 59854 50006
1999 4 7.62 1.55 60995 50199
2000 1 10.61 2.23 62612 50479
2000 2 11.68 2.36 64441 50777
2000 3 13.04 3.13 66541 51174
2000 4 14.13 4 68892 51686
2001 1 13.65 5.65 71243 52416
2001 2 14.11 5.97 73756 53199
2001 3 12.7 5.8 76098 53970
2001 4 10.88 5.48 78168 54709
2002 1 9.56 4.06 80036 55265
2002 2 9.85 3.68 82007 55773
2002 3 11.63 4.69 84391 56427
2002 4 13.24 4.55 87185 57069
2003 1 12.85 4.27 89985 57678
2003 2 11.25 4.58 92516 58339
2003 3 10.8 4.26 95014 58960
2003 4 14.42 6.22 98439 59877
2004 1 15.38 6.4 102224 60835
2004 2 20.37 8.53 107430 62132
2004 3 27.81 11.67 114899 63945
2004 4 24.86 11.5 122040 65783
2005 1 26.51 13.58 130128 68016
2005 2 25.97 16.46 138577 70815
2005 3 20.36 17.63 145631 73937
2005 4 21.67 20.34 153520 77696
2006 1 19.67 21.23 161069 81820
2006 2 14.76 19.85 167013 85880
2006 3 10.16 16.9 171255 89509

One Comment on “California V. Oregon Real Estate

  1. It’s also interesting to note the differences in how the markets fared in the 81 & 91 events. Oregon was slammed hard by the 81 recession – we had a timber-dependent economy then and as homebuilding stalled around the country we experienced the ‘double whammy’. -10.9% appreciation in Q3 of 81! Those were dismal days here. It wasn’t until Q4 of 82 that CA had a slightly negative quarter. While the early 90’s CA depreciation was barely noticed here. A lot of what drove that period of depreciation in CA was the slashing of defense spending that happened after the collapse of the Soviet Union (remember all that talk about “The Peace Dividend”? Seems quaint now). Oregon had (and has) little or no defense-related industry, but CA had plenty of it. However, the other thing that was happening in the early 90’s here in Oregon was that CA companies like Intel were expanding operations up here because of the lower costs of labor, electricity and land. I was one of the many transfers from the Bay area during that time. Those of us who were transferred up here were like kids in the candy store when we looked at houses that to us at the time just seemed dirt cheap.

    However, this time I don’t think we’ll be decoupled nearly as much as during the early 90’s. We’re not seeing the kind of growth in good-paying jobs like we did in the early 90’s. In fact, Intel has been downsizing. And they’ve found even cheaper labor in places like India. They’re the biggest employer in the Portland Metro area and they pour a lot of money into this economy. But this time the amount of money they’re pouring in is either stable or decreasing.

    Also, the credit tightening has only just begun and it will be evenly spread around the country.
    NovaStar (a large subprime lender) just announced large losses today and they also said that they would not likely have any profits until 2011 (no significant profit for four years!?) http://www.thestreet.com/_yahoo/newsanalysis/banking/10339886_2.html

    Also take a look at this commentary in the Wall St. Journal where they worry over the possible recessionary effects of the credit crunch:
    http://www.opinionjournal.com/weekend/hottopic/?id=110009681

Leave a Reply

Your email address will not be published.