Oregon Then & Now … AIC’s Past and a Look Ahead to the Future
When AIC was founded in 1984 by Michael Welt and Marty Hall, our goal was to fund common-sense real estate loans throughout Oregon. AIC grew by honoring commitments and acquiring glowing word-of-mouth reviews. Today, our agile team takes pride in custom solutions that meet the exact needs of our clients. As we think back to the 37 years we’ve been in business, it’s clear that a lot has changed in Oregon! Our long history gives us a unique perspective on market trends, real estate, local politics, and more.
It’s no surprise that Oregon’s population has skyrocketed since 1984! But it’s still incredible to look at the stats and consider how different the real estate market was back then.
Housing market in 1984
We all know that the housing market has been crazy in Oregon. But the market was full of up and downs back in 1984, too. After the Federal Reserve raised the federal funds rate in 1981, homeowner mortgage rates were an astounding 17-18.5%. This mortgage rate caused the sale of homes to drop 50%, from 4 million homes in 1978 to 2 million homes in 1982. During this time, more Americans began renting since they couldn’t afford homeownership. In 1984, the year that the U.S. Census began tracking the percentage of families who could afford to buy a modest home in their home state, buying a home was affordable for a little over 60% of families.
In the first half of the 1980s:
- Inflation-adjusted average home sales price: $237,003
- Housing starts: 1.3 – 1.7 million units
- Homeownership rate: 63.9% – 65.6%
- Housing price-to-rent ratio: 1.14x – 1.27x
Housing market today
While 2021 looks very different from 1984, it’s not necessarily easier for would-be homebuyers. Are mortgage rates lower? Of course! But buying a home has become increasingly impossible for a large percentage of the population. For starters, half of people aged 18 to 34 are rent-burdened, which means more than 30% of their income goes to rent. There’s not much room to save for a down payment when a large percentage of your income goes to rent. One study has shown that 70% of millennials, or people aged 25-40, say they can’t afford to buy due to rising home prices. Plus, this age group has 35% less wealth than prior generations did at the same age. Consider these national housing facts:
- Median home price: $79,900
- Median square footage: 1,605
- Price per square foot: $49.78
- Square footage you could buy for the price of a 2020 home: 6,515
- Inflation-adjusted average home sales price: $375,850 (-1.1% compared to the previous year)
- Housing starts: 1.3 million units (-2.4% compared to the previous year)
- Homeownership rate: 67.9%
- Housing price-to-rent ratio: 1.34x
Just for fun ... Pull out the Atari, turn up your collar and check out what went mainstream in 1984 pop culture:
- Indiana Jones and the Temple of Doom
- Karate Kid
- Sixteen Candles
On Billboard’s music chart:
- “Like A Virgin” by Madonna
- “When Doves Cry” and “Purple Rain” by Prince
- “Jump” by Van Halen
- “The Heart of Rock & Roll” by Huey Lewis & The News
“Where’s the Beef?”
– Clara Peller, Wendy’s commercial
“I’ll be back.”
– Arnold Schwarzenegger, in The Terminator
“You really like me!”
-Sally Field upon winning an Oscar for “Places in the Heart”
Hot Christmas gifts:
- Cabbage Patch Kids
- Trivial Pursuit
- Transformers action figures
- Duck Hunt video game
- DNA fingerprinting was introduced.
- The world’s population was 4.75 billion
- The price of a gallon of gas was $1.13
- The Commodore 64 computer was $799
- Michael Dell started selling Dell Computers (targeting households instead of high-end consumers)
Seeking an investment partner?
Do you need to apply for a hard money loan? Are you wondering if our loans are right for your project? AIC has been bringing together Oregon real estate opportunities and private money since 1984. Our clients span from Portland metro down to Medford and over to the Oregon coast. Our personalized, hands-on approach gives them the confidence and knowledge they need to achieve success in the industry. Contact us at 971.224.5145 or use our form and we’ll get back to you soon!
Questions? Give us a call!
Categories: Investing Strategies