The recently released numbers on Portland home prices say it all. With prices falling 21% from their peak in July 2007, the local real estate sector has a long road ahead to recovery. But some say the key to saving the industry, both locally and beyond, is targeting the growing masses of Generation Y consumers who are already on their way to reshaping the economy.
BY KEVIN MANAHAN
The recently released numbers on Portland home prices say it all. With prices falling 21% from their peak in July 2007, the local real estate sector has a long road ahead to recovery. But some say the key to saving the industry, both locally and beyond, is targeting the growing masses of Generation Y consumers who are already on their way to reshaping the economy.
That was the dominant message at the Portland State University Center for Real Estate’s 5th Annual Real Estate Conference, held yesterday morning. Over 730 people attended the sold-out event at the Portland Marriott Downtown Waterfront Hotel, many of them students or alumni from PSU’s real estate programs. Sharing their expertise as speakers were Leanne Lachman of Lachman Associates LLC, Joe Cortright of Impresa Consulting, Dave Messner of Costco and Eric Campbell of CamWest Development LLC.
And while each of them offered their own takes on various real estate issues, they all echoed the sentiment that the younger generation’s increasing influence – particularly as more baby boomers leave the work force – is a crucial factor to watch. “This phenomenon deserves a lot more attention from the real estate industry than it has been getting, because the demand from this group will be very strong for a very long time,” Lachman said, adding that the housing market’s slow recovery is being helped by the first-time homebuyers coming from that group.
Another trend is more and more young adults are moving into dense urban areas. In the 1990s (the last decade with available data), the number of well-educated young people in the Portland metro area grew by 50%, or roughly five times faster than the nation as a whole, Cortright said. And when it comes to making a community succeed, it all comes down to those demographics. “The biggest single factor of economic success is your ability to attract and retain talented people,” Cortright said. And one only needs to look at history to see the effect an educated workforce can have on the economy: Between 1964 and 2004, the number of people with four-year degrees increased from 10 million to 50 million, Cortright said. “There is very little about the growth of the U.S. economy that you cannot explain by the fact that we quintupled in those four decades the number of well-educated people.”
With more of those young adults seeking out urban neighborhoods, developing walkable, vibrant communities is important for capitalizing on that movement. “It’s about being where people want to be,” Campbell said. Even Costco is seeing the opportunities in urbanization: Following demographic patterns, the company has already stepped out with plans for locations in regional malls and vertical development with other retailers, Messner said.
Of course, all the focus on attracting more young people to urban areas presents some initial concerns, particularly in Portland where incoming residents are sometimes seen as threats to locals competing in an already shallow job pool. But Cortright is quick to point out that it’s a worthwhile trade-off. “The unemployment rates in Oregon and Portland are higher than they would otherwise be if we weren’t so attractive,” Cortright said. “That’s bad news in the statistical sense, but in the long run, having more talented people here is the critical ingredient to long-term economic success.”
