There is a saying that the only two things that people don’t like to buy on sale are real estate and stocks. I talk to many would-be homeowners and investors that are content to stay on the sidelines, waiting out the inevitable decline in our real estate market.

Home prices and investment properties are the product of international/national factors (mostly interest rates and access to loans), regional factors (net migration, job creation, earnings power) and local/neighborhood factors (supply, uniqueness). I’m most influenced by a simple story: Portland metro population is expected to grow from 2 million people to 3 million in the next dozen or so years. Combine that with a city planning heritage and local culture that reveres the environment and tightly controls the urban growth boundary, preventing sprawl. Most of the new supply will need to be high density homes, which is actually preferred by the two biggest demographic groups that are moving to Portland: young creative class and retiring boomers. If you own a detached, single family home it will remain unique. When the creative class matures, and wants more family-friendly housing, it will become even more valuable.

This story is most dependent upon the regional factors that impact prices: net migration, job creation, and quality of jobs. So, I’ve taken a keen interest in tracking this. It led me to Richard Florida’s book The Rise of the Creative Class. I saw in today’s Sunday Oregonian that Florida has just released a new book entitled Who’s Your City. The title of Florida’s article today is Place + Happiness =Portland Prosperity. In it, he suggests that Portland is on track.

Based upon extensive mining of Gallup data and his own primary research, Florida suggests that the 3 key factors for a city’s expected prosperity are : 1) the basics, 2)openness, and 3) quality of life. He claims we do fine on the basics, and excel at the other two.

Florida gives examples of some creative clusters that are thriving in Portland. One cluster he doesn’t mention, but one that I’m getting excited to understand more about is a cluster of expertise around collaboration. I’ll make that a topic for an upcoming post.