The future of Portland's real estate market

[Gordon Friedman]

Hi BP-Portland. I'm curious about opinions here on the future of Portland's real estate market and if there are any leading indicators you're looking at.

I think it'd be hard to deny Portland has had a tough year with coronavirus, wildfire and civil unrest. It seems to me that Portland used to be a national news media darling but is now portrayed as dangerous and unruly. Many of the restaurants that drew people here are closed. Portland has a reputation is being unfriendly to business. Homelessness has only worsened. Couple that with evolving local and state landlord/tenant laws and it makes me wonder about the local market's future. 

Full disclosure about me -- I'm a newbie who's trying to read everything and anything before hopefully jumping into my first deal this year. Happy to connect.

-G

[Mathew Wray]

Hey @Gordon Friedman,

Welcome to BP! 

I'm of the belief that it depends on your timeline. Are you trying to make a quick turn in the next year or two? Then maybe I'd weigh the factors a little more. I won't deny that our city has taken a hit in image this year. And, at the same time, the underlying fundamentals are still strong: more people are moving here than leaving, wages are still rising, and we're still picking up an influx of folks from tech-towns who can work remotely and want to be here. 

On the longer timeline, I don't worry. I've heard people talking like Portland is the next Detroit and I just don't see it. Yes, many of our restaurants and businesses are hurting...but that's not unique to Portland. As restrictions end over the year I do expect to see more of those places come back on line. The chefs and small-business owners I know identify heavily with their professions. I haven't heard one of them say they're giving up and switching industries. 

I really look at like this: do you believe that we'll be better off in 10 years than we are now? With history as our guide, I think the answer is yes...property values will be higher, interest rates won't be as good but that's not a bad long-term thing (although I'll miss the cheap money), there will be a larger population base, the Urban Growth Boundary will still be in place. 

There will be some uneasy years between now and then as the city figures out how (or if they want to) handle the homelessness issue and hopefully business regulations will relax (but if not, there are other less-friendly cities that're still growing), but I'm still bullish on the long-term outlook. Just be prepared to ride a roller-coaster in the meantime. It might not be worth the risk and headache, even if you do believe the outcome will be better, but that's a choice only you can make. 

Mathew