Three economists with the Oregon Employment Department recently prepared a report about why Oregon’s unemployment rate tends to exceed the national average. The report, which was written up on the StatesmanJournal.com, states that the three reasons for Oregon’s high rate of unemployment appear most related to these factors:

1. Oregon’s lack of very large urban concentrations compared with Washington and California.

2. Oregon’s mild climate in its most populated areas relative to the climates of many other States.

3. Trends in employment, which push Oregon’s unemployment rate up during cyclical downturns and during periods of industry-specific job loss.

Now that is fine and dandy till I read another paragraph. It was stated that the state’s relatively high unemployment rate is not a new phenomenon.

For 25 of the 33 years from 1976 to 2008, Oregon’s annual average unemployment rate exceeded the comparable national rate. In 16 of the past 33 years, it was among the top 10 state unemployment rates.

So if you take this information in, you would think the real estate market has been in a slump for years. But that’s not the case. You have to go back to 1983 in the days of double digit interest rates, oversupply and a recession-rocked timber industry to find the really bad times.

I think it has more to do with price. Compared to California that was seeing the price of homes skyrocket, Oregon was seeing a much slower and lower median price increase. What lower pricing can do is keep the affordability index very high and in turn let a much larger pool of buyers be able to purchase homes.

So even if you have a large unemployment rate, there are more buyers able to buy home that have jobs.