One long, strange trip occurred on the Oregon Trail. This also might be one way of looking at today’s economy in the far northwest corner of the country. The Pacific Region includes Oregon, Washington, Alaska and Hawaii. Waves of settlers headed west by wagon routes and boats to this region in order to scratch a living — be it logging, farming or fishing — from the land.
Fast forward a couple of centuries and these industries still define the region. Oregon and Washington
Some of the most productive commercial fishing in the U.S. occurs in the waters off these four states’ coastlines. Think of the boat crews made famous by the TV show, “Deadliest Catch.”
Neighboring California and its free-spirited ways has cast a long shadow on the Pacific Region, especially on the two most-populous states of Washington and Oregon. Author Ken Kesey wrote about loggers in his novel, “Sometimes a Great Notion,” and he also was a founding member of the Merry Band of Pranksters, who trekked across the country in the 1960s in their wildly painted bus, Furthur, while spreading their nonconformist ways.
They typically made their communal homes in California and Oregon, and helped to popularize the Oregon Country Fair founded in 1969 near Eugene, an event similar to Burning Man. This influence persists today. Tie-dye may be making a comeback, but it never went out of style in these states.
Oregon and Washington were early pioneers in the craft beer movement and still rank among the top 10 states for numbers of breweries. Breweries generate more than $2 billion annually in economic impact for these states, as well as about $300 million a year for both Hawaii and Alaska. It’s no wonder that Washington and Oregon became two of the first states in the country to legalize recreational use of marijuana. Alaska joined them and Hawaii isn’t far behind.
In this mix, some of the largest and most successful companies in the world have flourished. Boeing, Nike, Microsoft, Starbucks and Amazon all got their starts in this region.
The COVID-19 pandemic, however, has taken a toll on the Pacific states. Plummeting gasoline usage has hurt oil-dependent Alaska especially hard. The tourism destination of Hawaii has lost 160,000 jobs since pre-pandemic days. The Aloha State also has instituted a “Safe Travels” program that requires a negative COVID-19 test prior to arrival to avoid quarantine. The program has allowed more than 1 million people to visit the islands since October 2020 without a spike in coronavirus cases.
Oregon, Washington and Hawaii rank low in COVID-19 cases per 100,000 residents while Alaska comes in near the middle of the pack. All four states had fewer than 100 deaths per 100,000 residents as of this past March.
Spurred by a lack of inventory and low interest rates, home prices soared in three of the four Pacific Region states from February 2020 to February 2021. Hawaii ranked No. 1 in the nation this past February with a typical price of $689,945 for a single-family home or condominium, according to Zillow.
Washington and Oregon ranked No. 4 and No. 6 in the nation, respectively, with typical home prices of $478,000 and $409,000 at that time. Alaska came in 19th at $288,000. The U.S. average as of February 2021 was $272,000, according to Zillow.
Washington had home-price growth of about $56,000 during these 12 months. Prices in Oregon and Hawaii surged by about $40,000 and $35,000, respectively, during the same period. Alaskan home prices, however, only grew by about $3,300.
Part of the reason for this home-price growth was a lack of inventory, especially in major cities. As of December 2020, for example, Portland had less than one month of for-sale supply, the lowest inventory level in at least 30 years, according to a Regional Multiple Listing Service report. Seattle recorded its lowest number of homes for sale in 20 years this past August, according to an economist with Windermere Real Estate.
Focus: Commercial fishing
Thirty years after Europeans discovered the Columbia River in 1792, the Hudson’s Bay Co. attempted to cash in on the rich fishing of the Pacific Northwest by purchasing salmon from native fishermen and sending salted fish to Boston. This endeavor failed when the fish arrived from the long voyage smelling foul and Boston officials charged a steep import tax.
Since then, however, the commercial fishing industry has thrived in the Pacific Northwest and in the Hawaiian Islands. As of 2016, the most recent data available from the National Oceanic and Atmospheric Administration, more than 128,000 people were employed in commercial fishing via harvesting, processing, distribution and retail sales across these four states, while regionwide revenues exceeded $13 billion.
Many in the fishing industry are concerned about what environmental and climate changes could mean for the future of the industry. The industry has often sided with environmentalists on Northwest forestry issues. And a board member for the Seafood Harvesters of America told a Seattle TV station in 2019 that the fishing industry is already witnessing declining seafood supply due to climate change.
What the locals say
“Inventory is obviously the No. 1 topic right now — and lack thereof. I also think COVID opened up the entire nation to choose where you want to live. In the last six months, I’ve done [loans for] five people that work on social media platforms that can work remote, who have all lived in Silicon Valley and are now able to decide where they want to be. Most of them have roots at the original spot. Most of them are from Eugene (Oregon) or have family in the area. Same with the ones that I’ve done in Portland — that’s their original stomping grounds.”
Branch manager and senior loan consultant, Summit Funding
3 Cities to Watch
This central Oregon city was originally named Farewell Bend, but the U.S. Post Office in Washington, D.C., determined the name was too long and shortened it. Incorporated in 1904, Bend is now a bustling community of more than 100,000 along the Deschutes River, surrounded by ample recreational opportunities such as biking, hiking trails and skiing. Major area employers include St. Charles Health System (4,500 employees), tire dealership Les Schwab (1,100 employees) and the Sunriver Resort (1,000). The median household income in Bend is $65,662.
Honolulu was founded in 1850 as the capital of the independent Kingdom of Hawaii. Hawaii became a U.S. territory in 1900 and Honolulu remained the capital city. Today, Honolulu is not only the largest city in the state with about 975,000 residents, but it also serves as headquarters for most of the state’s largest employers, including staffing company Altres (10,000 employees), Bank of Hawaii (2,500) and Outrigger Hotels (1,600). The median household income is $85,857.
One of the most prominent landmarks in this Washington city is the Tacoma Dome, a massive gray- cement arena next to Interstate 5. With a population of 220,000, Tacoma had a thriving downtown prior to the COVID-19 pandemic, including a mix of museums, theaters, a downtown waterfront and a renovated Elks Lodge turned into a McMenamins brewery and hostel. Major employers in the area include Joint Base Lewis-McChord (54,000 employees), Emerald Queen Casino (2,150) and Boeing (1,500). Tacoma’s median income is $62,358.
Sources: Agricultural Marketing Resource Center; BendOregonJobs.com; Blue Book Services; Brewers Association; CareerOneStop; City of Bend; City of Tacoma; Encyclopedia.com; Hawaii News Now; Hawaii Tourism Authority; History.com; Honolulu Star-Advertiser; KING-TV; Marijuana Moment; McMenamins; National Oceanic and Atmospheric Administration; Northwest Power and Conservation Council; Oprah Daily; Oregon Country Fair; PickYourOwn.org; Seattle Post-Intelligencer; The Associated Press; The New York Times; The Oregonian; The Pacific Coast Federation of Fishermen’s Associations; The Seattle Times; Travel Tacoma; U.S. Bureau of Labor Statistics; U.S. Census Bureau; U.S. Energy Information Administration; U.S. News & World Report; York Saw and Knife; Zillow