Everywhere we turn in Bend, Oregon it seems something is under construction. You can be grateful about this resurgence of our economy but might want to be a little leery of what may be around the corner if housing and construction costs continue to rise.
Nearly every major economic indicator released last week, according the Wells Faro Economic Commentary by Mark Pinkowski, pointed to an expanding economy. The massive 321,000-payroll gain in November was by far the biggest news. Most industries saw employment gains accelerate, most notably in construction, retail trade, financial activities and professional and business services.
In Central Oregon the unemployment rate has slowly, but consistently lowered in all counties over the past year. Oregon’s unemployment rate has remained relatively stable over the last year and that is not likely to change soon. It is expected to continue to fall slowly, dropping to 6.5 percent over the next three years, according to the latest economic forecast from the Oregon Office of Economic Analysis.
November Small Business Indexes, a monthly report providing unique and almost real-time insight into employment and revenue trends of small businesses with fewer than 20 employees, showed that small business employment increased 0.15 percent in November. Oregon ranked fourth in the nation, tied with Nevada and below Virginia and Utah.
Central Oregon homes in the $425,100-$525,000 price range saw an impressive 101 percent of average list price to sale price over the past year…sales higher than the asking price. The $625,000+ range also saw a marked improvement from 92 percent in October to 97 percent in November. This price range is usually the slowest moving in the overall market so this increase demonstrates that all price ranges are remaining active and resulting in sales.
However, just because you can sell your house quickly and at the price you want doesn’t mean you can turn around and build or buy another similar valued home. Construction prices are rising and contractors are busy with numerous projects.
The Office of Economic Analysis calls for recent job gains to persist for two to three years before longer run demographic trends weigh on growth rates.
In the previous recession so many business got caught with too much debt and too much overhead. Despite our gains it still seems prudent to proceed cautiously and prepare for the future.
We wish you the very Merriest Christmas, happy holidays and an especially prosper New Year. Thank you for being a consistent reader of Cascade Business News.
