Posted by: Josh Lehner | October 18, 2019

Maybe Fun Friday: Mid-Valley Commuters

This week I was part of a great real estate event here in Salem. I’ll write up much more on the Mid-Valley outlook in the next week or two. However, as I was putting it all together, something in the latest Census data really stood out to me. The number of Salem area residents who commute to work outside of Salem really jumped last year. Now, this isn’t a surprise to anyone who has been paying attention to the real world. Local growth has been strong and I-5 has been a parking lot during rush hour for some time. But the Census data really hadn’t been showing any increases until now. It was hard to reconcile anecdotal evidence and stories with the hard data. Well now they’re both signing the same tune. Commuting is up and at least 70% of these workers are heading north to Portland for work.

Last summer our office really dug into the data, looking at migration patterns in the Willamette Valley, incomes, homeownership rates and the like. What it showed was there had been a reversal in long-term migration patterns and at least in 2015 and 2016, the net flows were from Portland to Salem. However the 2017 data released last fall was a reversal of the reversal, or a big return to historical patterns of net flows from Salem to Portland. As someone who follows the data, I was a bit stumped on the issue.

However, the latest 2018 data now is an indication that the Northern Flank didn’t hold. There is likely net flows from Portland to Salem again. We’ll have to wait another month or so for the microdata to be released, where we can update our more detailed look to know for sure. But I suspect at least some of this is housing-related. At the real estate event, Portland State’s Gerry Mildner noted that there is about a $100,000 price differential in home prices between the Portland and Salem markets. In our office’s previous look, the Portland migrants to Salem who bought homes basically split the different. They bought homes that were about $50,000 more expensive than what local buyers bought, but those prices were about $50,000 less expensive than what home buyers in Portland paid.

Given we know the vast majority of people move for housing- and/or job-related reasons, this all makes sense. But to the extent that commuting is up, it looks like the moves may be for housing opportunities, while also keeping their existing jobs.

Now, commuting is much more prevalent throughout the Mid-Valley as seen in the chart below. 1 out of every 3 Linn County residents with a job works outside of the county. 40% or so head toward Corvallis, while a third head both north (Salem) and another 16% south (Eugene). 1 out of every 5 local residents in both Corvallis and Salem commute elsewhere for work. Part of these patterns is certainly the close proximity of the areas to each other and the fact that they are all defined as separate metro areas. The three main cities are all within 45 minutes of each other, making commute times long but not insurmountable.

Note on the chart that very few Portland area residents with a job commute outside of Portland. It looks like if you don’t have to live there for work, you don’t. UPDATE: It’s always important to talk about levels and rates. I didn’t at first. My apologies. This very small percentage for Portland (2.8%) does equal a lot of people given Portland’s size. It means more than 35,000 folks leaving the region for work. That’s about the same number as Salem commuters, and also about equal to the number of Albany and Corvallis commuters combined. Also note the relative share of commuters in Grants Pass MSA and Medford MSA. As expected, the percentages are larger from Josephine to Jackson than vice versus even if the absolute number of commuters is similar.

Bottom Line: Commuting is up across the Mid-Valley. Salem area residents are working outside the region to a larger degree than they have before. Some of this is housing-related as the cost differentials drive some migration trends. As such, the housing supply and affordability problems appear to be spilling over into neighboring regions. If true, this marks the first time this is really showing up in the Oregon data, even as the anecdotal evidence has been building in recent years.

Stay tuned for more on the outlook in the coming weeks and a deep dive into the microdata in a month or so.


Responses

  1. […] Source: Maybe Fun Friday: Mid-Valley Commuters | Oregon Office of Economic Analysis […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Categories

%d bloggers like this: