Survivors of the real estate crash heard encouraging words from national and regional insiders Thursday during the Southern Oregon Economic Summit.
Yet difficulties linger that will slow recovery.
For more on Southern Oregon Economic Summit, see the Economic Edge blog at www.maitribune.com
Lawrence Yu, chief economist for the National Association of Realtors, predicted home prices will rise 13 percent over the next two years. Job growth and household formation are on the upswing, but jobs are still scarce, housing starts will lag, and there will be a continued shortage of housing, driving up prices.
Small builders have historically outpaced large firms throughout the country, but banking regulations have made it harder for community banks to lend to builders. "The Wall Street-funded builders are getting bigger now, and the smaller boys have been shut out," Yu said.
The event at the Craterian Theater was jointly staged by the Home Builders Association of Jackson County and the Rogue Valley Association of Realtors.
The long-term recovery is all about jobs, yet in Southern Oregon they've been slow in coming, Yu said in an interview. "One is seeing job recovery in California, strong job recovery in Seattle and Portland," Yu said. "But in the Medford area, so far, the job numbers remain flat — no job recovery."
While he couldn't precisely say why, he suggested some possibilities.
"Maybe some of the regulation is too excessive in terms of setting up business," he said. "Maybe it's just a natural lagging economy, meaning other nearby economies have to begin doing well before people begin moving into the region."
But local advantages remain, Yu said. "There are many people living in California who come to Oregon, and that trend slowed down during the Great Recession," he said. "But now it is likely to pick up as the economy recovers."
In a study by the National Association of Home Builders last year, 56 percent of survey responders said they didn't want to be housed in a high-density community. "Density has a high trade-off in itself," said David Crowe, chief economist for the NAHB. "The extreme, of course, is a condominium or apartment-type living, where people are willing to live in smaller areas so they can be nearer other things they enjoy in life and be able to walk to them."
Yet many people prefer to be more isolated, able to limit noise and interaction with other people. "Those are tensions that exist and have always existed," he said. "There is a strong desire in our polls and surveys for single-family homes, but economics have driven the size of those lots down."
One of the challenges for remote economies such as the Rogue Valley is that there are limited employment sectors, said Josh Lehner, an economic analyst for the state, in an interview.
Metropolitan areas, such as San Francisco, Seattle and Portland, have highly diverse economies.
"That's where you have the vast majority of your startups, your smaller employers and your professional services," Lehner said. "That's what economists call creative destruction, the new firms, the births and the deaths. That's where the activity originates and where a lot of the growth starts, and then it spreads out."
Conversely, construction and government sectors are at the center of Southern Oregon employment, he said, and both have suffered recently. "It's not that there is so much construction or so much government in this area, there is just less of everything else," Lehner said. "The public sector usually continues to have increased revenue and increased activity. This time that hasn't been the case, with a substantial number of school teacher layoffs and some policemen. It's more pronounced in the smaller metropolitan areas."
One way to hit it big in outlying areas, he said, is when an industry with a major presence in a region heats up.
"It was true of timber in Southern Oregon in '60s and '70s," Lehner said. "And you are seeing that in Montana and North Dakota now with energy."
Reach reporter Greg Stiles at 541-776-4463 or firstname.lastname@example.org.