Is Oregon Oceanfront Property the best value on the Pacific Ocean or any Ocean?

[AJ Wong]

There is no place like home and no where like the Oregon Coast to invest in an Oceanfront property. 

This wonderland is not for everyone, but for those that visit for the first time, if they aren't impressed by the impressiveness of the rugged and natural environment, it is not the place for them to purchase or invest in property. 

For the rest of us, owning an Oregon coastal STR or vacation rental, beach home or beach cottage or moving to the majestic coast permanently, is a goal or dream come true.

Who among us has not envisioned the precipice of Real Estate ownership, an oceanfront home? 

Yes, we all have slightly different paths to 'making it' but we can all agree that location is essential, and there is limited oceanfront land and homes to go around. 

In fact, I'd estimate that along the entirety of the less than 400 mile Oregon Coast there are merely 10's of oceanfront property available in Oregon on any given day, in comparison to our northern and southern neighbor border states, which combined average 100's-1000's. 

Certainly there are reasons for this, the OR Coast is incredibly sparsely populated. The largest population center is Coos Bay/North Bend with a combined 15-20k people that balloons in summertime. 

The entire Oregon Coast combined has only hundreds of thousands of full time residents. That's it. The size of a small CA or WA city, spread across the entire coastline. 

The Coast is isolated and difficult to reach, it's raw, rugged and disinviting, until you arrive. 

Small town feel, big time lifestyle. Very very few places offer the lifestyle and outdoor amenities of the Coast. Fishing, crabbing, surfing, kayaking, hiking, boating, dune-ing and did I mention fishing??

In most towns, there are rivers, mountains and ocean in the same photo! 

Unfortunately the secret is out.  What used to be a hidden gem, is still a gem, just not so hidden. 

Partially due to the Pandemic, but also due to the state of the real estate market. Valuations have exploded across the US. In Washington and California they were already very elevated, but today most investors are priced out of any opportunities in ore densely populated regions. 

The vast majority of my clients are out of town-ers that likely could invest in their respective local markets, but probably not in a property that is comparable, certainly not utilizing the same capital or leverage..

Every. Single. Day. I speak with clients looking to earn more bang for their buck, or more ROI. Not to mention a major bonus of getting out of where-ever they're coming from. That's not an insult to LA, SD, Seattle or anywhere else for that matter, it's just that no matter where they're moving from, it's not the Oregon Coast. Meaning, there is no comparison in valuation, investment options or genuine potential.

One of the absolute best examples I can offer is Oregon Coastal Oceanfront home and land. I will not go into the costs of oceanfront property ownership in California. From SD, LA, Malibu, Carmel, Big Sur...the astronomical valuations are sometimes difficult to FATHOM.. $10-20-100M is 'normal.'

Conversely, there is oceanfront land in the $300-400-500k range and oceanfront homes from $350-1000/SF in Oregon from $500k-700-1M. 

Don't get me wrong, Cannon Beach is not Malibu, but for the relative costs and investment potential and lifestyle, that maybe a great thing. 

Even if you were enlightened enough to have benefited from the unFATHOMable returns, where could you profitably invest those returns locally in LA county? Sure, you could invest, but it would not go nearly as far as it did when you originally purchased the real asset in California 10-20-30-40 years ago. 

Just decades ago many investors could not have imagined what Malibu or other Prime California coastal towns would become or the values they would reach...I get that same FOMO with Oregon Coast Oceanfront property and oceanfront STR vacation rentals.

Yes, local valuations have also climbed, but still $800-900-1.5M for some of these properties is notable. In most instances one cannot purchase the vacant land, install utilities, design and permit and construct the square footage for the same price. That's value. Especially considering that one can leverage with often as little as 10%!? down.  

A key metric is that the demographics and desirability of the Oregon Coast is exponentially improving. According to Yahoo the #1 county in the Pacific North West that is going to see livability IMPROVE due to climate change is CURRY COUNTY OREGON. Just south of Bandon Dunes golf course, comprised of my favoritest town, Port Orford in and around Langlois and the Gold Beach area. 

Politics aside..it's getting hotter elsewhere, but less rainy on the Oregon Coast and more hospitable year round. Fast forward 20-30-40 years and the Oregon Coast might just be a similar climate to parts of California. And it definitely won't be anything like LA County :) Major bonus, there will be water..

What will the Oceanfront Oregon Coastal real estate market look like then?

For my money, I think even the most expensive homes in Brookings, Gold Beach, Florence, Lincoln City or Cannon Beach are probably a bit undervalued. Not just in terms of their prices, but in what they provide, replacement costs and future development cost. Values are going up but so are the costs of contractions or duplication. Building a very large one 4-5K SF+ isn't often necessary for most buyer's and increasingly difficult to execute as material and labor costs rise. 

Also somewhat of a unique opportunity in Oregon is the potential to still secure a permitted or licensed Oceanfront STR that will generate very positive returns with considerable upside potential forecast.

High level overview, a $1M oceanfront home eligible for STR will generate roughly 10% (gross annual revenue) of valuation. I've reviewed many formal financials for oceanfront vacation rentals in Oregon and typically the production is highly consistent and between $120k-220k gross annually for properties valued at $1.2-2M. There are also 'recession' proof. The travelers that can afford a $500-700-1400/night oceanfront rental, will always be able to afford it, but they won't always be able to purchase it.

Why? They aren't making any more oceanfront land or oceanfront vacation homes on the Oregon Coast. 

If you or family, friend or clients are seeking an Oceanfront Property on the Westside..maybe consider the Oregon Coast. It's no longer so 'hidden' but more of an investment gem than ever. 

Cheers.