Friday, August 4, 2006
by Rob Levy, Prudential Northwest Properties
We have always had an interesting relationship with our neighbors to the south of us. It’s interesting to think there are 37 million Californians and only about 3.5 million in the ENTIRE state of Oregon.
In studying the very cyclical real estate market in California, it appears that the last four down cycles have produced a mass migration to Oregon, and I'm trying to figure out if the same will happen this time around. For sure, there will be the people who "cash out" of their home and move here purchasing a wonderful home where their kids can go to great schools, etc. The Rob Levy team have sold many this year and have many more such buyers in the works. Also for sure are the investors who are now seeing prices fall in many parts of California and are looking here for investments, we have several we are working with right now.
But what we are finding interesting - and for the first time in my 18+ years of being one of Portland's top selling real estate teams - is kids coming. By this I mean recent college grads who grew up in LA, SF, San Diego on most any big city, and have just gotten out of college and now can’t afford a home anyplace near the home they were raised in. We have sold, and are selling many homes to such clients as they are moving here for affordable housing (in comparison), plus the similarity of the time zones, political climate, and the close proximity ( they are 2 hours away from home with a non-stop flight. A recent study indicated that some 60% of college grads plan on living at home! (Please if my three boys currently in college read this, your Mom and I are planning on selling the home and buying a studio condo :-)).
So the big question is as California clearly has entered a slow down, plus in a recent report showing that 24 of the 28 largest markets are declining in value, will the migration begin in earnest as before? Well, let’s look at what’s also different this time.... The one major thing I can put my finger on is while we are in a robust economy, there aren’t the proliferation of high paying jobs here as in the last few cycles, but more service sector jobs - which indicate a need for more investor homes. But, it’s the lifestyle, dummy! That’s what brought me here 22 years ago, and Sandy on my team, and Cathy on my team, and Sandra on my team and Alicia too. With what we have to offer - mountains, ocean, rivers, beauty, great schools, ease of life, minimal commutes, and that all important UGB (urban growth boundary) which will continue to drive up costs within I just don’t see anything more than a slowdown here to more reasonable appreciation of maybe 7-10% vs. the 18% we have been seeing – and that’s just healthier for all of us.
But as with all predictions, time will tell........ Thanks for listening…… ROB
