Posted by: Josh Lehner | October 24, 2014

That 80’s Feeling, Housing Edition

I have been asked to speak at the Home Builders Association 2015 Housing Forecast in two weeks at the Oregon Convention Center. I have lots of new and hopefully interesting housing analysis that I will be publishing on the blog over the next two weeks, however I am updating some of our standard housing graphs and thought I would share.

As discussed before, Oregon’s economy today is very similar to where it was back in the mid-1980s. Namely, we are digging out from a severe recession and while activity and growth has returned — even at above average rates relative to the nation — we’re still not back to where we once were. The same applies to housing starts. Both the late 1970s and the mid-2000s were housing booms (and bubbles) in Oregon, followed by sharp corrections. Back then, it took nearly 9 years before starts returned to their long-run average. Today we are in year 7 of a similar bust.

Housing80s

As hard as it may be to believe, Oregon today is actually in a relatively better position in terms of construction jobs than back in the 1980s.

Housing80sEmp

Stay tuned in the coming weeks for some of the new research ahead of the presentation.


Responses

  1. You would think that construction employment would be trending better during this recovery than during the recovery from the 1980’s recession mainly due to the fact that 30-year mortgage interest rates were over 10 percent during the same point in the recovery cycle back then, compared to four percent or less in 2014.

    Considering the low-interest rate environment we are in, the housing recovery remains at a very weak pace.

    • Thanks Guy. You’re right about interest rates being really low today. But housing starts today are literally at the same level as back in the mid-1980s, even as Oregon has over 1 million more residents. However construction employment is much higher in absolute terms (more workers today) and in relative terms (smaller decline relative to peak). I guess this is due to the combination of remodeling work, but primarily due to more nonresidential work now vs then. However I do not know for sure.


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