Wednesday, December 8, 2010

It Really IS Different Here: Job Creation and Wages Have Not Kept Pace With Our Peers or Housing Prices

A recent report by ECONorthwest paints a rather dark picture for Portland's economic performance, as well as it's affordability when compared to its peers. The data clearly shows that Portland's ability to generate economic wealth for its citizens has failed miserably to keep pace with its peers or its still lofty bubble era housing prices.

"Portland-metro residents have lower wages and incomes than residents of peer regions. Forty years ago Portland-metro wages and incomes looked more like our peer regions, but since then our peers have steadily outperformed the region's economy. Today, our average incomes are 16 to 21 percent lower than those of our peers."

"The Portland-metro area does not notably out-perform our peers on compensating characteristics such as cost of living or quality of life. Our peers are achieving high quality of life AND higher wages and incomes."

"Multnomah County has lost 26,463 private-sector jobs since 1997. It ranks second to the bottom in job creation among 199 counties in the west over the last decade. In the 1990s, the growing gap between Portland-metro's economic fortunes and its peers widened significantly. Private-sector job growth stalled after 1997 and has declined since 2000. Meanwhile, our peer regions have been more resilient, replacing jobs and wages lost"

And despite throwing healthy sums of tax money at our public schools and public teacher's unions, Oregon's academic performance at the high school level is dismal when compared to our peers. Lastly, Oregon's college affordability ranked a lackluster 44th out of 50 states.

There is much more data and analysis in the report, none of which bodes well for the future of housing prices in the Portland metro area. Lofty real estate values require plentiful jobs with healthy incomes and monthly cash flow to service mortgages. The Portland metro area has clearly failed to keep pace on the jobs/wages side, and its housing/real estate prices will inevitably suffer going forward as a result.



The Oregonian