Recession News Yields Conflicting Conclusions

Regional economic health is certainly a contributing factor to consumer confidence, and by extension, is a weighty concern for those considering a home sale or purchase. By and large, the national media has viewed the Northwest favorably in terms of housing stability, the job climate, and so on.

But recent reports can be a little confusing. Friday’s USA Today ran an article on recession risks, showing Oregon in an ‘expansion’ mode. Yet the University of Oregon Economic Forum suggests the region is still ripe for recession. So, which is it?

According to USA Today/Moody’s Economy.com report, based on its key indicators (including employment, production, retail sales), Oregon charted as growing its economy and held top 10 positions for healthy home value increases, an improving agricultural revenue base, and a high percentage of exports. Only the Medford MSA was shown as ‘at risk’; how Bend evaded that tag, I don’t know.

Meanwhile, the University of Oregon’s report on Economic Indicators suggests otherwise, based on its review of unemployment, building permits, production and other index components:

The University of Oregon Index of Economic Indicators rose 0.2 percent in December, to 102.6 (1997=100), with the majority of index components improving during the month. Despite the December gains, the behavior of the index in recent months remains consistent with a substantial risk of recession in the near future.

Both studies are measuring similar (not identical) factors (I encourage you to visit both sites to view their methodologies), but have come to different conclusions. Despite some recent gains in manufacturing, the U of O study cites weakness in labor, housing, and consumer confidence as their main contributors.

So, how do you view these reports? Some will say they are inconclusive; others will claim we are in denial. How does it affect your decision to buy or sell a home? Or are broad economic measures less important than the state of the real estate market specifically?

March 10, 2008 · Filed Under National News

Comments

3 Responses to “Recession News Yields Conflicting Conclusions”

  1. skeptictank on March 10th, 2008 12:31 pm

    I think the fact that they still have Bend in expansion shows that the USA Today numbers are perhaps a bit old.

    It seems I recall that Oregon’s unemployment was up a bit last month. We were late coming out of the last recession and we’re late going into the next one. Certainly the timber industry is now in recession with lots of mill closings. Sure timber is a lot smaller part of the OR economy than it was in the 80′s, but it’s still pretty important.

    It looks like CA is leading the way. With the kind of nasty cold CA is getting now, how can OR escape?

  2. Ron Ares on March 10th, 2008 8:21 pm

    CA’s influence on our housing market is undeniable (see Medford and Bend). Some are hoping that higher-limit conventional loan products will provide some liquidity for the California real estate market, and therefore, allow some to make a northward pilgrimage.

    But I’m not betting the farm on it.

  3. Uncle_Git on March 11th, 2008 10:02 am

    I really wouldn’t the thing with the higher limit loans is people still have to qualify as far as income and downpayment goes.

    That’s not going to happen – the only thing that would help is a return to 0 down, no doc loans for any amount.

    Not going to happen -= Portland is going to slide into price falls this year – we are just as exposed as California – just behind them in the cycle.

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