Explaining Southern California's economy

A tale of two California housing recoveries: Coastal and inland

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A construction worker cuts a piece of wood on the top of a home under construction at a new housing development on in Petaluma, California. A recovery in housing is developing in the state, according to UCLA economists. But it's geographically uneven.

For a while now, the economists at the UCLA Anderson Forecast have been arguing that California is experiencing a two-track economic recovery from the Great Recession. The coastal side of the state is doing relatively well, while the inland regions are struggling. Other economists dispute this analysi; they maintain that the recovery is more robust in Northern California than it is in the Southern California.

A key lens to look through when trying to figure out which analysis is right (and really, both have some merits) is real estate. The UCLA Ziman Center for Real Estate and the Anderson Forecast have just released an brief report on the housing situation, written by economist Jerry Nickelsburg. He notes that prices appear to be moving up in California:

The aggregate California home price statistics are encouraging....The S&P Case-Shiller
Index for San Diego, San Francisco and Los Angeles is the highest it has been since June 2011 and the median sales price is now the highest since 2008.