Saturday, January 2, 2021

Happy New Year!

Well 2020 is toast; here's to a new year and hopefully an end to the COVID-19 pandemic. Although the Corona virus managed to cause a lot of mayhem and disruption in 2020, locally the real estate market just kept chugging along.  

Vancouver and Clark County saw nearly 10% appreciation in in 2020 and 2021 is forecast for low double digits! That is rather robust considering the pandemic led to the highest unemployment rate in decades. But despite our local stellar numbers there are some areas in the country that did even better!

Areas with lower median home values often have the most opportunity for dramatic growth. There are many lessons that corporate America learned from COVID and one of them is that some jobs can be as productive or more productive in a remote or work from home environment, others not so much. 

This potential shift in some economic zones could lead to some dynamic changes in commute patterns, living arrangements and employment. Vancouver USA has undergone an amazing transformation of the Downtown and Waterfront areas and now is attracting new jobs and people. Other cities in a similar demographic and geographic situation have also done so and often with brilliant results. The potential "new office universe" could lead to more people coming to Vancouver rather than staying ion Portland. The "commute" may have less impact if work at home model stays around after the pandemic.

You can see a similar dynamic occurring in other cities including some that have striking similarities to Vancouver-Portland. Covington, Kentucky is a small city on the south bank of the Ohio River and sits just opposite of Downtown Cincinnati, Ohio. Covington has only 1/5 the population of Vancouver but it is part of a group of cities on the Kentucky side of the river that are similar in size to us, collectively. Covington has the "downtown" and "waterfront" that attracts the locals for dining, urban living, and activities. There are three counties in Northern Kentucky that make up the Kentucky portion of the Cincinnati Metro area and they are combined about the same size as Clark County with roughly half a million people. Median home values there skyrocketed in 2020 nearly 15% and area expected to do so again in 2021. The renovations in Covington's downtown including high rise condos, restaurants, park space and events have made it an attractive alternative to the more expensive, neighboring Cincinnati. Hmm, sound familiar?

Covington is an example of a city on a similar path that Vancouver is on and with similar resulting improvements to quality of life, jobs, and incomes. Covington also enjoys a border economics and city symbiosis advantage with Cincinnati as does Vancouver with Portland. Covington was run down and pretty rough until the recent years when new development began to transform the city into a wonderful place that has a bright future.

City leaders here in America's Vancouver are wise to look at other successful cities as they ponder the pathway of our own city.  

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