Orange County is leading the state and the nation in the recovery from the Great Recession, buoyed by a real housing bounce-back. But jobs have been slower to return, though the county's unemployment rate of 6.5 percent remains below that of both the state and the nation as a whole.
That's the conclusion of Economists from the Mihaylo College of Business and Economics at Cal State Fullerton, who took to the stage of the Hyatt Regency in Irvine on Thursday to present their 2013 midyear economic forecast. (They do this every year.)
How did Orange County do it?
Overall, California and Los Angeles have been recovering faster than the nation as a whole. But Orange County has been a true standout performer.
Housing is driving Orange County's robust pace of improvement. Typically, economists expect housing to lead the national, state and regional economy out of recessions. That hasn't happened with the Great Recession because the housing bubble got so large. When it popped, the market collapsed.
But the OC is now posting housing growth data that more closely resembles a bounce-back from a typical recession. After bottoming out in 2008, Orange County housing prices stabilized in mid-2012, according to the Fullerton economists. Since then, prices have risen steadily, and are now up 30 percent from their lows. The outlook is for annual price appreciation of 7-10 percent.
Jobs have been slower to come back.
Orange County's unemployment rate has generally been around 4 percent and has on occasion dipped below that, said Anil Puri, Dean of Mihaylo. The OC almost always had unemployment rates lower than the national rate.
But during the Great Recession, Orange County's unemployment rate shot above the national level, topping out at 9.9 percent in January 2010 (the U.S. employment rate rose above 10 percent after the financial crisis, but in January 2010 was down to 9.7 percent).
Now, the housing recovery has improved the employment picture to some degree. In February, unemployment in Orange County came in at 6.5 percent, significantly lower than both the national rate of 7.6 and the California rate of 9.6 percent. Puri thinks that OC's unemployment rate could eventually get back to pre-recession levels, but he added that it's going to take three to five years.
The OC's not completely out of the woods. While the housing market is recovering, there's a shortage of houses to buy at all price points, and especially under $500,000. That's pushing prices higher — a common story now throughout California.
Still, OC is on its way to recovery from the Great Recession.