It's HOT! Investors escape to the cool, green Oregon Coast for climate safe STR's

[AJ Wong]

Part of the reason I invested in the Oregon Coast in 2018 was I thought to myself, "In twenty years this is going to be a great escape."

My intuition served me well just two years later when the Pandemic hit, we fled LA to enjoy our 2020 summer and haven't really looked back since. Fast forward nearly six years and the rest of the world is catching up...or catching on fire?

This is not a political post, but I can guarantee the first comment is, "I don't pay attention to climate when investing." Well, then clearly you aren't paying attention at all..The world is changing (and warming) and the effects seem to be accelerating much faster than anyone has anticipated. I've got plenty of 'proof' because I've seen it with my own eyes. The water in the Intracoastal in South Florida is much higher at high tide than it was when I was a kid, the summers ARE hotter and the winters are shorter. Storms are stronger. The heat is problematic. Wildfire threat (especially for RE investment) is potentially catastrophic. 

Unfortunately, there aren't any places completely isolated from climate effects. We might not live like it, but we are interdependent on our environment and nature. One region of the country with natural abundance that offers present and future sanctuary is the Oregon Coast. Often 10-20-30 degrees cooler than the inland Valley's the OR Coast is a remote but accessible refuge. 

Here are some other factors and reasons the OR Coast makes a prime second home or vacation rental destination (for now and presumedly into the future!):

- Sparsely populated. Increasingly demanded. The largest city on the Coast, Coos Bay/North Bend combine for a population of less than 25k. There is a genuine housing shortage of all kinds on the coast, long term rentals included. The expansion of remote work and general affordability has driven an influx of young and retiring families to coastal communities. Coos Bay in particular was primarily a timber town and has had some difficult economic periods since it's hey day, but the downtown has grown up, there's yoga, a farmer's market and even a new Starbucks (which by the way you buy the brand new building they lease from!) lol..seriously though. 

- Natural splendor and resources. If you had to live off the grid (or just at a slower pace) the OR Coast would be a challenging environment but one that also offers plentiful water, food and refuge. 

- Warming weather. If there's a downside to the coast it's the erratic weather. It's cold, wet, windy and foggy at times. It's entertaining, but in the doldrums of winter it gets redundant. If there's a bright side..winters are getting less intense and summers have always been idyllic. They say it'll rain less and be more sunny on average in the decades to come..

- Low wildfire risk. On the very coast, generally wildfire risk is lower than inland for the aforementioned reasons. The marine fog layer and dampness keep trees fairly saturated. Wildfires do come down the southern river valleys as occurred in recent years in Gold Beach and Port Orford, but usually not all the way to the shoreline. 

- Attainable Assets. Until the pandemic, the Oregon Coast was very off the radar and while market demand and valuations have steadily climbed, there is still relative value to be found. From oceanfront vacation rentals to multi family complexes to RV Parks, boutique hotels or storage and industrial facilities, Oregon real estate investment opportunities come in spades. In contrast to our neighbors north, south and east of the border valuations are still reasonable and returns rationale. If location is key, coastal property (high up out of the flood zone) especially if there will be less of it...should continue to command a premium. 

- STR Permissions. For forward thinkers, funding a beach retreat can be the next logical action plan. One strategy for acquiring a coastal vacation property or future primary can be to secure and operate the property as a mid or short term rental to help sustain or offset the investment. Although most cities and counties have implemented STR rules or restrictions, in comparison to other regions active and licensable vacation rentals in Oregon are still very acquirable. In fact on average we consistently support a dozen or so coastal STR investors annually acquire and launch five star AirBnB's.

- Pacific Wonderland. Even if you won't invest in Oregon, you should visit for a recharge (I know of a few good AirBnB's!) You could play golf at one of the top public courses in the world, surf, fish world class waters, hike, dune buggy, or nothing at all. Either way it should be nice and cool on the coast. 

Have you ever visited the Oregon Coast, what's your favorite beach? Mine is Battle Rock in Port Orford.. Is climate or the costs of owning a property in more 'risky' areas something you consider when investing? 

[Calvin Thomas]

Maybe true, but horrible tenancy laws though.

[AJ Wong]

Quote from @Calvin Thomas:

Maybe true, but horrible tenancy laws though.

Agreed but improving..Not for STR though :)

[Calvin Thomas]

Quote from @AJ Wong:

Quote from @Calvin Thomas:

Maybe true, but horrible tenancy laws though.

Agreed but improving..Not for STR though :)

 Perhaps, but they are starting to take a page out of NYC in terms of residency requirements.

https://www.steadily.com/blog/airbnb-short-term-rental-laws-...

[Bruce Woodruff]

Quote from @AJ Wong:

This is not a political post, but I can guarantee the first comment is, "I don't pay attention to climate when investing." Well, then clearly you aren't paying attention at all..The world is changing (and warming) and the effects seem to be accelerating much faster than anyone has anticipated. I've got plenty of 'proof' because I've seen it with my own eyes. The water in the Intracoastal in South Florida is much higher at high tide than it was when I was a kid, the summers ARE hotter and the winters are shorter. Storms are stronger. The heat is problematic. Wildfire threat (especially for RE investment) is potentially catastrophic. 

Seeing it with your own eyes is not proof. I just listened to a long radio show with a top climatologist. This period of warmer temps (which is technically not even completely true depending where, how, and who you choose to get your data) has happened before and will happen again.

Still, if you enjoy cool. wet weather and Blue politics I imagine that Oregon would be a splendid place to invest. You should keep it to yourself though, if you get all the BP'ers buying in there, you will have more competition, fewer great deals for you :-)

[Jon Martin]

@AJ Wong I'm wondering if we do have more hot days inland, does that translate to warmer days on the coast as well in Oregon? The California coast gets foggier when it is hot inland, aka "June Gloom" that tends to persist well into August. Plus the Pacific Ocean is pretty cold, so it can only get so warm if the wind is coming off of the ocean. 

The only exception is when we have "Santa Ana" winds from the East in the fall, which are absolutely glorious days on the coast, but summer tends to be one of the worst weather seasons. South facing beaches fair best overall. 

[V.G Jason]

When Oregon faces it's natural disaster risk-- it's going to be more devastating than anything we face. It'll be the aftermath of a northern california earthquake, and it'll pull a tsunami in.

With that said, as an Oregon coastal STR owner I will take the chance it won't happen. Investing based off climate is absolutely necessary, call me a woke butterfly I don't care-- as someone whose made the biggest bets off weather plays I am willing to continue to try this.

[Connie Omari]

I've never heard of investing off of weather. That's smart!

[Nathan Gesner]

I grew up in Oregon. I have been on the same beaches for over 50 years and they are the same. There are 100-year-old, beach-front houses still standing where they have always stood. The idea that our climate is doing something completely new and that oceans will rise and wipe out property in the next 12 years is ludicrous and not scientific. Websites claim ocean levels have risen almost 10" in the last 30 years, yet Gore and Obama are still buying beachfront property, boats are still pulling into the same docks, etc. The idea that all weather should remain the same as it was on August 14th, 1972 is crazy.

The greatest danger to investing in the Oregon coast is the politics. Do you worry about the beach eroding? Check out private property rights! Do you worry about crashing waves tearing your life apart? Wait until the government wipes out your business and livelihood with unconstitutional laws in the name of "public safety."

I have always loved the Oregon coast. I will probably never invest there.

[Steve K.]

I heard Coos Bay is expanding the port? Seems like a great place to invest to me. My favorite beach is Wax Myrtle. Reminds me of Maine, where I spent some of my childhood (another place people are buying into for the same reasons). Whether real or perceived, we’re seeing the effect of climate change in these markets already. The UP of Michigan is another. 

[Nathan Gesner]

Quote from @Steve K.:

Whether real or perceived, we’re seeing the effect of climate change in these markets already. The UP of Michigan is another. 

Granet Loma is over 100 years old and built right on the water. You may have heard Lake Michigan has risen six feet in the last ten years, then it dropped three feet recently, yet somehow this property appears unaffected: https://wcrz.com/the-worlds-largest-log-cabin-is-in-michigan...

People love to point out rising levels but discount levels when they drop. They point to extreme heat as proof, but discount extreme cold. Have a bad hurricane? We need to stop all fossil fuels! But when we go ten years without a major hurricane event despite all the predictions that they would get worse . . . meh.

Climate fluctuates by the minute, hour, day, week, month, season, year, decade, and century. 

[AJ Wong]

Quote from @Steve K.:

I heard Coos Bay is expanding the port? Seems like a great place to invest to me. My favorite beach is Wax Myrtle. Reminds me of Maine, where I spent some of my childhood (another place people are buying into for the same reasons). Whether real or perceived, we’re seeing the effect of climate change in these markets already. The UP of Michigan is another. 

 Coos Bay is working on a mega grant..it could actually happen this time: 

If the project goes forward, port leadership and other proponents believe it could be a real gamechanger for our region. The project would take approximately five years and that could become a big boost in construction jobs. All told, they estimate the project would create 2,600 construction jobs over the five-year period and 2,500 direct and 6,900 indirect jobs for Coos, Douglas and Lane Counties once the facility is constructed. It is anticipated that approximately 2 million import and export containers will move through the Port of Coos Bay every year.

The new port will be the first fully ship-to-rail port facility on the U.S. West Coast. 

[Jon Martin]

Quote from @Nathan Gesner:

Quote from @Steve K.:

Whether real or perceived, we’re seeing the effect of climate change in these markets already. The UP of Michigan is another. 

Granet Loma is over 100 years old and built right on the water. You may have heard Lake Michigan has risen six feet in the last ten years, then it dropped three feet recently, yet somehow this property appears unaffected: https://wcrz.com/the-worlds-largest-log-cabin-is-in-michigan...

My family has a place on the sand in Lake Huron. We measure the beach from a fixed point (driftwood stump) every year. Over the 3+ decades we've owned it the length of beach has changed wildly in both direction by 20-30+ feet. 

People use single data points of sea level change as a marker, while ignoring the multitude of geological and other human impacts (erosion, wetland destruction, coastal development etc) that have an impact on land level. In some areas the sea level has decreased. Mean sea level averaged across the entire world is around 2 mm/year, or 6-8 inches/100 years. 

I don't disagree that climate change is happening on some level, however the impacts are largely speculative and debatable. 

[Steve K.]

That’s a pretty big deal for that area if it goes through! We were there last August when it was 97 in Bend, 107 in Eugene, and 118 in the gorge. The coast was the place to be! There was a marine layer and a breeze keeping things much much cooler than even 1/2 mile inland. Pretty weird to see the Mackenzie River valley on fire, we were hoping to kayak there but the rainforest was burning so we went to the coast instead. The first time I went there I was surprised how underdeveloped and relatively inexpensive it is. Super pretty but the water is cold and sharky, and it rains a lot. 

[Drew Sygit]

Michigan has Oregon beat as we have more freshwater!

[Bruce Woodruff]

Quote from @Drew Sygit:

Michigan has Oregon beat as we have more freshwater!

 Haha, but it's not oceanfront, LOL.