Just a quick update on new construction and housing activity.
While one hears and reads much about the current, so-called construction boom, it can be helpful to place the recent numbers in perspective. Within the Portland MSA, only one county – Multnomah – is back to pre-Great Recession levels of building activity. The others are about half-way back. It’s really difficult to call the current levels of permits and starts a boom when you examine the numbers. See here for more on new building relative to population growth. Also, stay tuned for more housing analysis in the near future.Below is a similar chart for each of the state’s other major metropolitan areas. We have discussed the Bend population growth vs housing start issue previously. Like Portland and Bend, the other metropolitan areas are seeing lower levels of new construction in recent years, even if it is picking up a little bit.
The bigger implications here, which the future work will focus on more, is housing affordability. As population growth accelerates — which it is and will continue to do so — and vacancy rates are low — which they are — affordability is lost. In our office’s latest economic and revenue forecast document, we added housing affordability as a risk to the outlook (see PDF p. 18.)