MARKET SPOTLIGHT: Pacific Northwest

best place for business and careers, citing a large influx of highly edu- cated Millennials, and calling it one of the most environmentally friend- ly cities in the world along with a cost of living that is 13 percent above the national average. With a population of nearly 2.5 million people, the metro area is home to Nike’s world headquarters and Intel Corporation. According to the Portland MSA Economic & Population Outlook for April 2019 , published by the North- west Economic Research Center (NERC) at Portland State University, job growth, which has been trending upwards for nearly a decade, is pro- jected to continue its upward trend this year although at a slower pace. Likewise, the NERC outlook reported a slowdown in net migra- tion to the Portland metro after two strong years in 2016 and 2017. For 2019, population growth in Mult- nomah County (Portland is its county seat) is projected to be 1.28 percent. “People are coming here with really good salaries, or good equity from the sale of a home elsewhere, or both,” said Dr. Gerard Mildner, academic director of the Center for Real Estate at Portland State Uni- versity and an associate professor of real estate finance. While unemployment in the Portland metro area has remained unchanged over the past year at 3.7 percent in April 2019, and popula- tion numbers and job opportunities are expected to continue to grow, Mildner sees the area’s housing situation directly affected from three perspectives. First, a lack of available land supply, due in large part to a de- cades-long experiment with urban growth boundaries. “The urban growth boundary is a line that goes around the city and it takes an act of the city council to move it. Anything outside of it is

Portland, OR

markets is better than in primary markets. They all feel the need to have a little bit of Portland in their portfolio. Real estate is a respect- ed property type and in secondary markets it is much more afford- able,” he noted. Like many others, Wenger was one of those investors who sold off her California portfolio before relocating to Portland. “As an investor I’m of the opinion

strategy,” Wenger said. “I tried a few times doing flips using hard money. People I know who are doing flips are now saying they’re not going to do them. It’s almost impossible to find a house cheap enough to put money into and make money on the other side. There’s no safety margin.” According to ATTOM, flips ac- counted for 4.4 percent of all home sales in the Portland metro area

now knowing that this may be their only chance,” Mildner said. “The rent control regulation goes down to four- unit buildings while the inclusionary zoning regulation covers buildings that are 20 units or bigger. Yet despite these regulatory restrictions, he believes investors will continue to see Portland as a place of opportunity. “What investors have realized is the return in the secondary

that there’s always a deal some- where. You just have to look for it,” Wenger said. “People are moving here from all over the place.” A veteran investor, Wenger has worked on both sides of the aisle, utilizing both a buy and hold strat- egy and flipping properties as well. Although using hard money loans to finance flips in Portland hasn’t worked out for her. “I think buy and hold is the safest

not open for development,” said in- vestor and Realtor ® Sharon Wenger with MORE Realty. Second on Mildner’s list is the area’s inclusionary zoning regula- tion aimed at promoting permanent affordable housing. Lastly is the state’s recently passed rent control law, which directly affects landlords. “This law is likely to cause mom and pop landlords to do their best to increase rents up to 10 percent right

28 think realty housing news report

august 2019 29

Made with FlippingBook Online newsletter