Housing fallout bruises Oregon, Lumber demand has fallen
The downturn in the housing market that roiled Wall Street this week is beginning to take a toll on the Oregon economy.
Oregon homeowners have suffered relatively little pain from the sharp slowdown in the nation’s real estate markets. But the state’s construction business and its timber industry, still a major supplier of lumber for homes nationwide, are starting to suffer.
Lumber mills have curtailed production and jobs. Across the state, construction of new subdivisions and condos has dropped sharply, although a continued boom in commercial office construction has offset declines in residential building.
Oregon, late to the national runup in housing prices, can plan on continued fallout from the national real estate bust.
For most Oregonians, the market’s biggest consideration is home values, and Oregon is seeing its own slowdown.
“At this point, the housing slump continues, and it seems there’s no end in sight,” said Dae Baek, acting state economist.
A red-hot housing market helped propel the Oregon and U.S. economies the past few years.
But the housing market has been cool since last year, when a growing number of people with spotty credit began to default on their mortgages. Some speculated the dip would be limited to the subprime mortgages designed for buyers with weak credit.
But the housing world took a major tumble this week after Countrywide Financial, America’s largest mortgage lender and a bellwether for the industry, said more good-credit borrowers were falling behind on their loans and the housing market might not start a recovery until 2009.