Construction and Real Estate in Northwest OregonFebruary 28, 2018 Employment in construction and real estate is back to normal in Northwest Oregon. The five counties in Northwest Oregon have joined the nation in recovering from the Great Recession. Unemployment rates are near record lows in Benton, Clatsop, Columbia, Lincoln, and Tillamook counties, and local economies are essentially at what economists consider to be full employment. To top it off, the construction and real estate industries, which led the boom and bust from 2005 to 2012, are finally back to their expected levels of employment.
The construction industry lost about 1,500 jobs during the Great Recession. It started growing again in 2013 then expanded greatly in 2017. It has almost returned to its peak levels of 2007 and 2008 during the housing boom. Employment in construction is typically about 4 percent to 5 percent of the total industry employment (excluding self-employment) in Northwest Oregon. For example, in September 2003, before the housing boom, construction employment was 3.9 percent of total industry employment. By September 2017 it had returned to 4.3 percent of total employment. Although construction employment isn’t quite back to its pre-recession peak, it is back to normal. We need to remember that 2007 and 2008 were times of an unsustainable boom in construction, and those employment levels don’t represent a reasonable target for full recovery.
The financial side of the housing industry didn’t suffer the employment losses that construction did during the Great Recession. The industry cut only about 40 jobs during the recession on an annual average basis for the region as a whole. (Two years of data are confidential, and not shown in the chart above.) These jobs exclude real estate brokers and agents, who are considered similar to self-employed workers. The industry has regained all the job numbers lost during the recession and added even more in 2017. The Great Recession probably had a larger impact on income in the real estate industry than it did on employment. Sales commissions and bonuses are a regular part of compensation in the real estate industry and as sales fell, compensation fell. Even total wages fell $1.8 million from 2008 to 2010 in real estate in Northwest Oregon.
But real estate prices and sales have improved significantly the past few years, even if they haven’t returned to boom-era levels. The real estate listing service, RMLS, publishes records for many real estate sales in the region. For the North Coast (Clatsop, Tillamook, and Lincoln counties) RMLS records show residential sales more than doubled from 2011 to 2017, and median prices rose 40 percent. Residential sales also doubled in Columbia County and the median price rose by 90 percent. In Benton County residential sales rose 54 percent and median prices were up by 20 percent. Benton County generally weathered the recession fairly well, and had less loss to make up. The RMLS data are not comprehensive nor a random sample, but they are indicative of a recovery in the region’s housing market.