Posted by: Josh Lehner | October 31, 2018

Bend’s Economic and Housing Outlook

This morning I am part of the Bend Chamber of Commerce’s Economic Impact Breakfast. Tom Potiowsky, former state economist and current Northwest Economic Research Center director will deliver the keynote, while Employment’s regional economist Damon Runberg will set the stage and moderate the discussion. Should be a great event. My presentation focuses on the statewide economic outlook but I have incorporated some local material as well. What follows are the Bend and Central Oregon specific slides from my presentation.

First, Bend’s labor market is tight. As we’ve discussed before, job growth of 5, 6, 7% annually is the norm in Central Oregon during expansions. That said, like the state, growth is slowing in Bend as the ranks of the unemployed and those out of the labor force shrink. Everyone had a job again and the strong economy has pulled workers back into the labor market. Slower growth by itself should not be a concern. In fact lots of good economic things happen at full employment.

Chief among those good things are wages rise, as do household incomes. The biggest driving force behind Bend’s income growth in recent years is the strong economy. More residents are working and an even bigger increase is seen among those working full-time. Households in the middle and bottom part of the distribution are fully reliant upon the labor market to generate any sort of income gains. All they have are wages. They don’t have capital gains, rental properties or the like to boost income.

As is always the case, when there are jobs available, migration flows return. Central Oregon attracts young families and retirees for the most part. And we all know the quality of life, scenic beauty, and outdoor recreation opportunities are second to none. These migration flows are even stronger in Bend than throughout the rest of the state in recent decades. Today only 1 in 3 adults in Deschutes County was born in the state. Another 20% were born in — you guessed it — California.

These migrants provide an ample supply of young, skilled workers for local businesses in addition to increased consumer demand and sales. Looking forward, Bend is expected to add just under 5,000 new residents a year, and just under 2,000 new households a year for the next decade. Obviously they need a place to live! Housing supply is beginning to pick up in Central Oregon but has yet to fully catch up with the population gains. As such, affordability is a local challenge, just as it is statewide.

When we look at where the household growth is going to come from, it largely follows the overall migration patterns. The largest increases will be seen among older households. Now, this growth is not just due to migration, but also due to the aging of the population. Many of these households already live in Central Oregon. However, much of the growth seen among the 20, 30 and 40 year old households will be new residents and newly formed households. It is important to keep in mind that in terms of housing, by one’s mid-30s there is a 50/50 split between renters and owners. Last time I crunched the numbers for Bend that breakeven point was 37 years old, but that data is a couple of years old now.

For more on Central Oregon see all the great work Damon does as the regional economist.


Responses

  1. […] Source: Bend’s Economic and Housing Outlook | Oregon Office of Economic Analysis […]


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