Oregon Housing Market Outlook: Cautious Optimism
According to the Register-Guard, experts predict that 2007 will be a year of continued, albeit slow, growth in Lane County, Oregon.
Financial expert Bill Conerly sounded a note of caution, however, saying he is telling his clients they need to plan for a worsening scenario.
A year ago Conerly, an economics consultant based in Portland, put the chance of a nationwide recession at one in 10.
Now, he is putting it at between one in 10 and one in 5.
Conerly cites a housing market that he says is overbuilt nationally and the volatility of the economy locally as the causes for his concerns this year.
He said he tells clients that they need to develop an early warning system pegged to the sources of revenue that are specific to their enterprise.
Ed Whitelaw, founder and president of consulting firm ECONorthwest, said he was also concerned about the U.S. real estate market, particularly the growing percentage of people’s wealth, or savings, that is in their homes.
Oregon foreclosure rates are increasing, Whitelaw said, which he found troubling.
The housing market is becoming increasingly volatile, Whitelaw said, making it that much more likely that a downturn in housing can coincide with high Oregon mortgage payments and an unforeseen event such as unexpected medical bills.
U.S. Bancorp economist John Mitchell said that, even with the weakness in housing and auto sales, however, the U.S. economy continues to grow and is in the sixth year of an expansion.
Consumer spending also continues to grow, and demand for home mortgages should remain high, he said.
Portland State University professor and consultant Tom Potiowsky said that businesses are going to continue to be in an expansion phase in 2007, after being cautious in the initial stages of the state’s economic recovery. The Oregon housing market should rebound slightly this year.
Brian Rooney, regional economist with the state Employment Department, said he expects new home construction in Lane County to slow down in 2007, “but I don’t expect it to drop off the face of the Earth.”