Ten Predictions for Oregon Coast Real Estate the next Decade

[AJ Wong]

It's hard to believe that I left Southern California for Southern Oregon almost a decade ago but although a lot has changed, much has also remained the same. I moved here for the nature, ocean, investment potential, weather (wait for it), isolation and cost of investing and living. I'm still here for all of that but the Coast is gradually growing and the future looks of the real estate market is coming into focus. Here are a few predications for where the Oregon Coast Real Estate market is heading: 

- Main Street takes increasing notice and makes increasing investment. Since we've moved here we have seen: Starbucks, Planet Fitness, TJ Maxx, Harbor Freight, Dutch Bros and dozens of restaurants and small business open. It's not a stampede but it is an indicator of where major corporations believe the trajectory is.

- Bend-ification. Sort of. If you have not traveled to Bend, you should. What a place! It's exploded for luxury living and development and is genuinely one of the nicest and well planned places I've been to anywhere. Certainly those that remember the 'good ole days' probably aren't stoked with the pace of growth but I have a feeling it could just be getting started.. Likewise of the Coast. It will never be densely populated because of logistics, but what we have seen since our arrival is some major new construction and planned communities. I anticipate investment on a corporate scale like we're seeing in Coos Bay and whispers of on the north coast. 

- Second home and working retirement boom. The Oregon Coast is not a premier retirement destination (yet) because of inadequate medical facilities, time consuming travel and a frequently harsh environment. In fact most sellers are Boomers heading to be closer to family or facilities, but most buyers are either younger families seeking more value or mid-lifers that want to enjoy their second or investment home while they can. It's been a fairly exponential increase in the quantity of younger families and faces around towns. 

- Short-term Rental No Go Zones. I've purchased a handful of STRs and sold nearly fifty. What I can tell you is that if the current pace of regulation and consumption continues, this time next decade, owning or purchasing a short-term rental on the Oregon Coast will be a rarity. In the past few years the inventory of zoned or eligible STRs For Sale or that change hands annually is about half of what it was pre pandemic. The majority of our STR sales have historically been previously non-operating STRs but that ratio is shifting. Looking forward - visitors to the coast will grow but legal accommodations will not.

- Hotel & Motel Development Re-investment. While residential nightly accommodations might not see substantial inventory growth, boutique motels and name brand hotels will. There are talks of a new luxury hotel coming near Bandon Dunes with essential accommodations to potentially host a major one day..but also to accommodate the 35K+ rounds of golf per year. Bandon is basically Disneyland for dudes. Anticipate similar focus on the north coast and there are handfuls of examples of boutique hotels that have refreshed and transitioned to online booking platforms. With travel focus squarely on health and wellness, it it no surprise that our local beach just topped the list of the best places to digitally detox and investors can anticipate significant investment in the space over the next 3-5 years and beyond. In my opinion the Oregon Coast is millennia behind WA & CA (and everywhere else for that matter) in terms of hospitality design, marketing and amenities. 

- Florence is going to boom as a result of the growth of Eugene. I spend part of the year out of the country and reaching the Oregon Coast is not efficient. Unless you're heading to the very north coast, PDX offers a lot of flights and accessibility but reaching the central and southern coast adds back unnecessary travel time and costs. Corvallis or Eugene are usually the next best options (keep an eye on Coos Bay/North Bend they are adding flights daily but limited routes for now) with Eugene just over an hour from the Coast. Head west and you'll arrive in Florence, a town with sufficient amenities and realistic proximity for out of state and in state second home owners. 

- Sunnier, warmer days will become the new normal. If this winter is any indication, the climate predications for the Oregon Coast have been spot on. It is obviously very dry everywhere in the Western US this season, which is concerning. I've had more than my far share of wildfire relationships (with our Baja casita nearly burning down just before the LA fires) and although not impossible, wildfire risk directly on the coast is generally low. Overall the average temperature here can often be 20-30 degrees cooler than just inland. Climate refuge is real and there are few places that offer the retreat as the Coast. During the heatwaves and wildfire smoke a few years ago and during the pandemic we were boating and hiking..(sorry not sorry). 

- Appreciation will be unbalanced. Property valuations will grow unevenly not so much in terms of markets but in property types. A lot of the inventory on the Oregon Coast is ancient. Very little new development or construction has taken place and in a harsh environment, many homes need TLC. Updated and meticulously maintained homes will see their return on time and investment, as will brand new homes, acreage, developable land, industrial and luxury homes and STRs as well as 'prime' commercial and multi family. What might struggle a bit? Older condos, original condition homes and especially large (3KSF+) properties in very original condition. 

- Multi Family Rental inventory increases, slowly..if you want to see a barrier to entry market, do a quick search for multi-family properties for sale on the Oregon Coast. You'll find very few listings and even fewer that are updated from this century. A friend of mine recently converted an old motel to long term because the demand for rentals and ROI was so strong.The development that has taken place over the past few years is primarily larger apartment complexes in places like Lincoln City, Reedsport, Coos Bay and North Bend. Mom and Pop developers are few and far between.

- Ultra Luxury Community to hit the Oregon Coast? There are hints of $2M+ communities on the northern coast but could we see a fully planned ultra luxury community (possibly with a golf course) to hit the Coast in the next decade? My money is on an exclusive gated community getting approved and launched sooner rather than later likely in or north of Lincoln City (maybe Pacific City or Nehalem?) and if I had to guess elsewhere..I'm thinking near Cannon Beach, North Bend or somewhere in Lane County. I'm hoping for Sea Ranch California 2.0 (let me know if you have any big ideas!) 

- Bonus for good luck: Land, Water and Resources will be in high demand. You would think that a place like Oregon is full of houses on acreage, but on the Coast you would be wrong. Take a guess how many homes are listed for sale on over ten acres at the time of publication? +/- 70 less than half of which are asking less than $1M...properties with their own water and that are self-sustaining will increase in value and demand as ownership costs continue their upward trajectory. 

Longtime locals probably won't like this, but the Coast is prime real estate and it's just a matter of time until others take notice. 

Potenital Set Backs:

As with all expansion, there is inherent risk. Some of them on the Coast include insufficient labor supply and workforce housing. Without enough hands, constructions projections can’t or wont move forward.

• Infrastructure. The same remoteness that makes Oregon desireable makes is susceptible to failures and repairs. Erosion is a major issue in some areas especially those where Highway 101 travels along the Pacific. This area hasn’t seen MAJOR improvement in decades at a time that it is needed most.

• Transportation. Getting to and from the Coast is not easy (which is why people come). Electricity and energy cost increases have been tolerable as have insurance costs, but if inflationary trend continue and density increases, the cost of doing business could reduce accessibility.

[Jay Hinrichs]

nice write up..  as to MF.. I had a project I owned in Lincoln city that I got approved for 140 unit MF.. cost to build vs rent made it non starter ..  rents are not hight enough on the coast to build at todays prices and insurance. 

there is a very large chunk of properly zoned property north of lincoln city that has been planned for decade or more I have not been back in a few years not sure it its starting to develop but if memory serve's it was zoned and planned for 500 plus parcels.

Sea Ranch is north of SF  as you know and you really cant compare the two although its a drive to get to Sea Ranch as well. but that project was developed and sold when high demand or rural properties was in vague. It was a land play just like all the Boise Cascade subdivisions built in CA in the 60s.. Different times now. One could not pull that off in todays market or development restrictive land use and zonings..  Bandon that is world class they did a great job there but still very hard to get to .