The big complication is that a lot of money has come into the larger markets – mainly Seattle and Portland – in a short period of time. That means builders haven’t kept pace with demand, and prices have gone up. My company, Local Market Monitor forecasts that prices will increase another 25 percent throughout most of the region over the next three years. But what happens after that?At some point, supply will catch up with demand. In addition, computer technology businesses are notoriously cyclical, and Chinese investment can be curbed by sudden policy shifts.

So, investors must approach the local markets carefully, keeping in mind that different strategies are appropriate for different markets.

In Seattle and Portland – also Bellingham, Bremerton and Eugene – the ratio of home prices to rents is so high that regular investments in rental property are not a good bet. Investors can either buy single-family homes and divide them into multiple rental units, or can pursue higher-income renters. In Seattle, the latter isn’t a bad idea; 45 percent of the population is renting, and the high average income – $65,000 – means there are a large number of software engineers at upper-pay levels who can afford high rents.

The cyclical risk of the high-rent strategy, however, means that investors should plan no more than a five-year horizon.

Northwest - 2017

In Seattle, further price increases won’t lead to a highly over-priced market that could crash – there’ll be a soft landing – but in Portland an eventual price decline is quite likely because price are already high. That doesn’t mean you shouldn’t invest in Portland, just that you need to have an exit plan and stick to it.