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Migration to Portland: Good For Housing Market

Portland State University’s Population Research Center puts out an annual report on population. Looking at Multnomah County, we added 8,480 people between 2006 and 2007 and 49,549 since 2000. That’s a steady 1% increase per year. Obviously not everyone one of them is a home buyer but the vast majority do need somewhere to live. There’s no way to predict how many of them are potential buyers so I’m not going to bother with even some conservative math by guessing how many people per family, job status, ability to qualify for a loan, etc. If the stats showed a decline in population this would be an entirely different post. One more thing before I hit “post.” My working definition of “good for the housing market”- a positive indicator for a stable market without sharp spikes in either direction. It’ a piece of the puzzle, not the complete picture.Portland Real Estate Blog

28 Comments on “Migration to Portland: Good For Housing Market

  1. That’s the demand side. Do you have any data on changes on the supply side?

  2. Migration study

    Hope the link works, if not here’s what you can google: United Van Lines publishes a migration study each year. And since they do 30% of the business I guess it is considered pretty accurate though take it as you see it.

    Just thought this might interest some folks.

  3. JP- Data on the supply side? The tongue-in-cheek answer is “look at the construction cranes.” I’ll take a look for some empirical data.

  4. Charles-

    Too many cranes might suggest that supply is increasing faster than the population change. That is the increase in supply is greater than the increase in demand.

    It seems like stability would be maintained when changes in supply approximate changes in demand. In other words a stable initial value, and stable changes keeps the market stable. If the initial value is not stable, then we need to know what the right correction and direction.

    One of my concerns is that supply is increasing too fast relative to demand.

  5. Exactly. We’re looking at puzzle pieces. The cranes are probably a bigger source of supply than the migration is to the demand supply.

    With some effort, we could probably pin down a pretty accurate supply-side count. It would be harder to do with the demand supply because we can’t read people’s minds.

  6. Throw in Clackamas and Washington counties and the increase is over 23,000 people moving into the area. Yet the real estate market at best could be described as flat.

    Perhaps the market is already overbuilt? With a few of these new condo projects converting over to apartments, due to a lack of sales, would back up that thought.

  7. Grasping at straws. Phoenix has very high in-migration as does Vegas. As for the cranes- are all the new migrants bringing trust funds or high paying jobs? Without that it’s going to be hard to purchase a 500sf 215K Cyan condo now that the funny money loans are gone.

    Am I the only one reading the papers?

  8. Phoenix has very high in-migration as does Vegas.

    a) Neither has a UGB nor any natural barriers. Nothing either locale likes doing better than building farther and farther out. Del Webb usually leads the way in Phoenix. The “You Can’t Unpave the Desert” campaign failed.

    b) Both had home prices rise $500-$1000 per week for extended periods of time during the boom. This was far more than any other American cities. http://seattlebubble.com/blog/wp-content/uploads/2008/02/case-shillerhpi_all200712.png

    c) Neither is comparable to Portland.

    Without that it’s going to be hard to purchase a 500sf 215K Cyan condo now that the funny money loans are gone.

    Those will probably go down drastically in price with no loss to the builder. With the cheapness of materials being used, they are probably going to come in at no more than $65,000 per unit to build.

  9. Before the recent election there was a discussion of Portland area builders that were backing Measure 49. They were doing this because they owned LOTS of vacant within the UGB and they feared Measure 37 would make it less valuable. Bottom line: there is a LOT of vacant, buildable land in the UGB, contrary to popular belief. THE UGB argument is a red herring. Despite the image, Portland has sprawl in Happy Valley and Gresham. Now I already hear the protestations that those aren’t in Portland. Well, much of Phoenix isn’t in Phoenix proper either. The housing downturn won’t stop at the Multnomah County line.

  10. Naysayer, I’m in total agreement about the UGB. There are plenty of infill projects throughout Portland as well as all of the new homes being built outside of Portland. And what effect does Vancouver, with no property taxes, have on the Portland market? With 12+ months of inventory currently in Portland, the theory of “it can’t happen here” is being blown out of the water.

    If you wish to talk about how a UGB increases the value of that city’s homes, check out Davis, California.

  11. Yeah, never mind. We’re EXACTLY like Phoenix. I get mixed up when I wake up in a room at Tapatio Cliffs, myself.

  12. If you are particularly interested in condo development I find this blog very helpful. It is pretty fascinating due to the links for other continents, countries, etc. I really enjoy the pictures posted of Portland. Pretty amazing photography.

    http://forum.skyscraperpage.com/

    Scroll down to the “Regional Section” then SSP: Local Portland

  13. If we didn’t have the UGB the cheerleaders would credit the hills or the Columbia river, or the salmon or perhaps solar flares for making Portland an oasis of never-ending appreciation in a world of declining real estate values. It’s actually almost a source of pride that a place can think so highly of itself that it believes itself to be immune to the simple laws of economics.

    I moved here partially for that attitude. But at some point it turned to an arrogance, an elitism that I find disconcerting. I honestly feel that San Francisco, a truly world class city, is now more real and down-to-earth than Portland.

  14. No need to get pissy NE. That’s usually my territory. If you’re going to play on the blogs in a time of high emotion regarding the housing market, you better grow some skin on yer pudding.

  15. If we didn’t have the UGB the cheerleaders would credit the hills or the Columbia river, or the salmon or perhaps solar flares for making Portland an oasis of never-ending appreciation in a world of declining real estate values. It’s actually almost a source of pride that a place can think so highly of itself that it believes itself to be immune to the simple laws of economics.

    In another response to you, in another thread, which you’ve apparently missed, I mention causes of the bubble deflation. I’m realistic, not cynical, about the bubble. But you’ve made it abundantly clear that you think Portland is comparable to Phoenix. Therefore it’s not worth discussing with you.

    I honestly feel that San Francisco, a truly world class city, is now more real and down-to-earth than Portland.

    It’s dirtier, has more criminal activity, and more crazy homeless wandering the streets, if that makes it more down to earth. I guess it does.

    No need to get pissy NE.

    It’s more exasperation with bullheaded ignorance and lack of logic, but thanks for your concern.

  16. Forgot to mention – the home prices are even further out of reach for median wage earners. More down to earth, indeed.

  17. So go out and buy something if you think we’re going to have a stellar spring and be back to 20% YOY. I’m sure Charles has something he can sell you.

  18. Yes! Because that’s exactly what I said – back 20% 50% YOY quite presto. (since we’re just like Phoenix.)

  19. “No need to get pissy NE. That’s usually my territory.”

    Next Poll:

    Who is the most Pissy?

  20. I’m still seeing plenty of development inside the UGB here in and around Beaverton. Seems that there’s still plenty of land to build on inside. Heck, there’s plenty of development all the way down to Wilsonville to the south and Hillsboro/Cornelius/Forest Grove to the West. Happy Valley has already been mentioned.

    Speaking of Beaverton, anyone take a recent drive around the MurrayHill/Sexton Mtn areas? Lots of McMansions for sale. The area is littered with forsale signs.

  21. Most cities would kill to have the infill development PDX has. Yet all I read from Portland residents is complaints. The skinny houses are ugly. Why destroy that beautiful large lot for two small lots.

    It’s sort of like the mindboggling stupidity of complaining about the winters. Portland residents who complain about the “harshness” of the winters should be given a one way Greyhound ticket to Minneapolis.

  22. This is the most negative realestate forum I have seen in a while!

    God, the renters and naysayers et al can certainly find decent work (and be homeowners) if they put their talents to real work. You guys are in analysys paralysis and crying sour grapes.

    reminds me of the saying that “mind is a terrible thing to waste”

    fyi, the portland market is very stable as proven by many independent reports. please stop whining.

  23. So you gave up selling RE and now provide daycare? Sounds reasonable enough.

    Pick up a newspaper. Read it. Doesn’t look like you have lately.

  24. Pick up a newspaper. Read it. Doesn’t look like you have lately.

    Sounds like daycare is still reading “The Secret” – that’s so 2006.

    Oh, and daycare, some of us are home owners.

  25. daycare said: “This is the most negative realestate forum I have seen in a while!”

    Yup, cause it’s not written by a bunch of realtors all chanting in unison “it’s a great time to buy, it’s a great time to buy!”

    “God, the renters and naysayers et al can certainly find decent work (and be homeowners) if they put their talents to real work.”

    I think most of us do have “decent work”, I know I have more than just “decent” work. Some rent (me), some own, but I know that by renting vs. buying in this climate I save enough $$$ to pay for in-house daycare so my wife can go to school. And if you still think that owning is superior to renting as you insinuate, I’m comfortable with my decision knowing that it’s not.

    “You guys are in analysys paralysis and crying sour grapes.” Nope. There’s a difference between analysis paralysis, and watching a trend and waiting for a better time to buy. Why buy now when I can buy later for 10-20% less and not wipe out my downpayment?

    “fyi, the portland market is very stable as proven by many independent reports. please stop whining.” Right. Show me these independent reports. Or come on over to my or Clint’s blog and we’ll show you reports that say it’s not. foreclosures are up 96%, home prices down are down 6% from their peak, 0% down mortgages are gone, sales are down 50% YoY, inventory is up to 12.8 months and the fed has cut rates without a bit of difference to mortgages? Yup, sounds stable to me! LOL!

  26. Let’s crank up the old blog chorus:
    Choosing to buy or sell real estate in any market is a personal choice and includes factors that may be unique to your situation. No matter how “bad” the market gets, houses will continue to be sold.

    In any market, the investment goal is to buy low and sell high but we all know that doesn’t always work. There can be regret in any market by getting in or out to soon.

    Yup, cause it’s not written by a bunch of realtors all chanting in unison “it’s a great time to buy, it’s a great time to buy!” But its keeper is a Realtor that is invested in the market. I honestly think the market will remain somewhere between minus five to plus five percent. I could be very wrong (in either direction), I could be right. Your opinion of the market will determine the right time to act. I endorse the debate and dissenting views as it should help people formulate their own views.

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