National Population Growth
We as a nation are growing, and are expected to add seventy million people to our population by 2030. To accommodate that growth we will erect two hundred billion square feet of construction, the bulk of which will flow to ten massive metropolitan regions called “megapolitans”. Seattle / Portland / Eugene is one of those regions.
Western US Job Growth
In tandem with the first is the continuing strength of the trend begun back in the 1970’s of steady job growth in the Western United States. Western states will experience a 40% increase in the number jobs by the year 2015. Clark County has laid a tremendous foundation for economic development over the past twenty years. The Columbia River Economic Development Council continues its successes in recruiting new companies into the area. We have a Visitor & Convention Bureau that markets our community to the world and documents a thriving Tourism Industry that has increased each year for the past decade. The Port of Vancouver has made significant investments in improved infrastructure and exploring world wide markets. WSU- Vancouver and Clark College have aggressive expansion plans. All of these work together in synergy to grow jobs for our population and translate into strong performance for Real Estate.
Federal Government Monetary Policies
Our national government policies on many levels consistently support real estate. Specifically historic low interest rates and easy credit. From the mid 1990’s our interest rates have remained stable ranging within. This stability encourages Real Estate investment. The credit expansion that occurred from 2003 through 2006 helped spur inflation, and inflation drives money into Real Estate to maintain value. Governments at all levels are increasingly creating public – private partnerships that support redevelopment efforts. Real estate is the tool that produces results in this arena.
Real Estate Fundamentals
The fundamentals of a real estate investment; owning an asset that is essentially being paid for through rents, or cash flow from a business; with the sheltering of income through depreciation, and some appreciation from inflation, and preferential tax options at the time of sale make this asset class a continuing outstanding vehicle for generating or protecting real wealth. US Real Estate has historically outpaced inflation, and in general exhibited lower volatility than general investment markets.
Beacon to the World
America is the world’s haven for financial investments. We have fifteen trillion dollars of commercial real estate, one third the world’s supply. Foreign investment in the US is expected to triple in the next decade. We have a stable government, strong capital markets, and a legal system that allows the freedom of activity, but maintains order. We have no barriers to foreign ownership and will continue to attract capital, which will enhance Real Estate as other hard assets, commodities and stimulate the economy.
The United States is an entrepreneurial society. Small business is the engine that drives innovation, creates jobs and wealth. Increasingly the small business owner is more educated and financially savvy than ever before, and is seeking to harness commercial real estate as a tool in their business plan.
Boomer Wave Crests
We still have the baby boomers just entering retirement. We will need more medical facilities and offices to treat them, and more places for them to live as they move from personal residences to retirement homes & apartments. This along with a general tendency for more people to live alone creates more demand for living space.