News

While average housing prices in the U.S. have fallen for the first time in 70 years, Portland/Vancouver prices are appreciating, says Gerard Mildner, director of the PSU Center for Real Estate. He shares some of the reasons behind the Northwest's good fortune.

Q: Why are our area housing prices holding up better than the U.S. average?
A: The Pacific Northwest has been relatively untouched chiefly due to the strength of our local economy, including access to trade in Asia. Other factors are continued in-migration, our low rate of subprime lending, low loan-to-value ratios for borrowers, and growth management constraints that have limited over-building, which is so evident in the Sunbelt markets.

Q: How has trade in Asia made a difference?
A: The opening of foreign trade in China and India has dramatically changed global trading patterns. Most low-skilled manufacturing jobs and some low-skilled service sector jobs have moved to Asia, creating opportunities for more high-skilled employment in the U.S. That's what's happening with the leading firms in our region—Intel, Nike, Boeing, and Precision Castparts—and it's that higher-skilled, higher-paid workforce that strengthens our economy and therefore our housing market.

Q: In 2008, what Portland neighborhood could see the highest increases?
A: If I knew the answer, I would be investing accordingly. Since 1990, we've seen large increases in the close-in neighborhoods on the eastside and North Portland. This gentrification may have played out, and we could see greater appreciation on the westside. My wife and I sold our house in Southeast Portland in October and moved to the westside, so maybe I'm not an unbiased observer.