UCLA economists say for the next year or so, Orange County’s economy will be like Alvin of the Chipmunks: kind of flat. But they say the local economy is starting to turn around. They released their Orange County Economic Outlook today.
The UCLA Anderson School economists expect a year of slow growth as Orange County emerges from the recession. They say evidence of recovery will be masked by continued high unemployment rates.
Still, the economists say there are some positive signs. The rate of job loss is declining, and they expect incomes to grow. They say housing prices are stabilizing and signs of homeowner distress are leveling out.
"Homes are now much more affordable. They’re affordable 'California-style,' but still affordable. And demand has picked up and home sales have picked up and inventories are quite low," says UCLA economist Jerry Nickelsburg. "So all of that tells us that the real estate market is about to turn and that we’re going to start seeing new residential construction."
Passenger traffic at John Wayne Airport has stopped shrinking, too. That’s another positive sign
"The biggest challenge is going to be basically filling in for the subprime mortgage industry that has completely disappeared. And that takes a number of years and that’s not over with yet. So until that is done, the demand for office space will not be back to where it was," says Nickelsburg, talking about Orange County. "We’ll have lower occupancy rates in offices and the commercial real estate arena is going to be weak."
Like the economists at Cal State Fullerton, who released their economic forecast earlier this week, UCLA’s Jerry Nickelsburg says the energy sector is a bright spot for future growth. But he says any economic growth in Orange County is going to be pretty slow for the next year – and maybe longer.