2006 Portland Real Estate Review

2006 turned out to be an interesting year. During the first half of the year, every one is so gung ho about real estate. No one even had the slightest thought that our market is going to slow down any time soon. Well, for those insiders like us, we believe that we'll ride high for another 2 years. Then in mid summer, Intel announced their large layoff plan. The media created a series of sensational news how our real estate market is heading towards a crash landing. Overnight, everyone panicked. Properties that usually took a couple of weeks to move were suddenly sitting on the market for months.

Then in December, there's a reversal of fortune. Our housing inventory suddenly got tighter. People are buying again. Prices are rising again. Builders are building again. All is good.

What's going to happen in 2007? Well, I wish I had a crystal ball to tell you the future. I don't. But what I can tell you through deduction is that our real estate market will continue to thrive. We may encounter a speed bump or two in the next 5 to 10 years, but our foundation for a strong market is there. Here's why:

1. The Oregon economy is stronger than ever. Whatever layoff from Intel is only a tiny fraction of our employment. The fundamentals of the city will keep on attracting young talents, companies to be located here. Our economy will continue to thrive.

2. Portland is "still" the most economical city to live in the entire West Coast. With our mild winter and cool summer, the city will continue to attract people from all over the country. That helps us solidify our population growth of 2 million by 2025 (doubling the current population).

3. Unlike places like Nevada, Florida, and Arizona where they're attracting mostly retirees because of the warm weather, Portland is gaining population from all walks of life, from working families to single professionals to retirees.

4. Our real estate growth had never been crazy like other "hot" spots in the US. The highest appreciation that we ever had was 17% in 2005. We haven't priced ourselves out of the market, at least not yet. Growth is a given, despite that it might be more moderate in the next several years.