Thursday, February 09, 2012

Oregon Is Dying

Today's domestic migration winner is tomorrow's loser. Without immigration, the top of the population list would be heavy with shrinking cities. As US geographic mobility continues its decline, Oregon has some soul-searching to do:

As Oregon’s total fertility rate remains below the replacement level and deaths continue to rise due to ageing population, long-term growth comes mainly from net in-migration. Working-age adults come to Oregon as long as we have favorable economic and employment environments. During the 1980s, which included a major recession and a net loss of population, net migration contributed to 22 percent of the population change. On the other extreme, net migration accounted for 73 percent of the population change during the booming economy of 1990s. This share of migration to population change declined to 56 percent in 2002 and it was further down to 32 percent in 2010. As a sign of slow to modest economic gain, the ratio of net migration-to-population change will increase gradually and will reach 70 percent by the end of the forecast horizon. Although economy and employment situation in Oregon look stagnant at this time, migration situation is not expected to replicate the early 1980s pattern of negative net migration. Potential Oregon out-migrants have no better place to go since other states are also in the same boat in terms of economy and employment.

Emphasis added. Other states are not in the same boat as Oregon. What about Texas? I think a return to the early 1980s pattern is a distinct possibility. At least, if you swallow whole the offered rationale for the rosy projection.

As far as Portland is concerned, I cast an eye towards the real estate market in Silicon Valley. The New York Times offers some speculation about the impact of Facebook going public:

It will be some time before the first Facebook shares are sold to the public, and even longer before Facebook’s employees are able to turn their paper wealth into cash and officially take their places as the newest members of the 1 percent. But the mere anticipation of the event may pour a little kerosene onto what is already a fairly hot local real estate market.

That should excite the folks in Oregon. Bay Area real estate refugees have been very good to Portland. The geographic arbitrage play looks to be getting stronger. And, if the economy is relatively worse in California, then neighboring Oregon would benefit from even more inmigration. Concerning migration, proximity matters.

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