Mortgage Woes Hit Orange County, Calif. Hard: Report
In its annual economic forecast for Orange County, researchers at UCLA's Andersen Forecast projected that the U.S. and California state economies will move in tandem over the next few years, with income and employment deteriorating further before the housing market evenutally hits bottom. "Our forecast for slow growth in the 4th quarter was dependent upon consumer demand holding up. The consumer is now uncertain about the effect of current economic policy and is pulling back. Consequently, economic growth projected for the current quarter in California is not going to occur," said Jerry Nickelsburg, a senior economist with the think-tank. "Moreover, the shrinkage in the mortgage finance market in Orange County creates a deep hole in Orange County employment, and history tells us it will be a five to six year process to fill it in with new jobs." The UCLA economists predicted that real estate in Orange County will begin to recover in the second quarter of 2009, with prices stabilizing some point thereafter; commercial real estate, however, is projected to remain weak in the region due to "a continued decline in the number of jobs in Orange County." Local employment is expected begin to make a modest comeback in late 2009, with finance, retail and housing labor markets having suffered the most; higher paying jobs in the professional services, information, government and healthcare sectors are expected to contribute to positive growth in average salaries. "Inflation in Southern California declines in 2009 and 2010," the forecast report read. "The absence of housing price appreciation, a slowdown in rental rate appreciation, weaker U.S. economic growth, and declining energy prices will relieve pressure on the general price level, both regionally and nationwide." The real estate woes in Orange County were profiled in-depth in the inaugural issue of HousingWire Magazine, which found the planned community of Ladera Ranch in the county's southern region to be among the hardest-hit. Prices in the community have fallen 33.7 percent in the past 12 months, as the area was home to myriad young families that used creative and risky mortgage products to afford a home for their families. For more information, visit http://www.uclaforecast.com. Write to Paul Jackson at firstname.lastname@example.org.