Experts say Ventura County down, not out

Acorn Staff Writer


Southern California and Ventura County have weathered the recession better than the rest of the country, according to a forecast by economic experts last week, but a slowdown in jobs and spending may put a damper on retail activity and home sales in the area.


"[Home sales] are still at what we consider very strong levels," said state Controller Kathleen Connell, keynote speaker at the 2002 Ventura County Real Estate and Economic Conference in Westlake Village, but she warned homeowners to be "cautious."


"The run-up in home prices may not be able to be sustained," Connell said.


Ventura County’s median home sales price of $312,500 increased 5.5 percent last year, 2 percent below the state average.


The single-family homes of Westlake Village remained the highest in the county.


Mark Schniepp, whose Santa Barbara-based California Economic Forecast prepared the 50-page forecast, said a tight housing supply from Conejo Valley to Ventura will keep existing home values intact.


"Average and media home selling prices have risen sharply since 1996 and now stand at all-time record highs," Schniepp said. "Not enough homes are being built in the county and not enough inventory of for-sale homes will be forthcoming."


The average selling price of new homes—most of them in Thousand Oaks—rose 10.4 percent in 2001 to $433,300.


"In the next few years, local governments in Ventura County will be faced with a difficult choice," said William Fulton, a public policy research specialist. "Either find ways to increase the amount of housing constructed inside SOAR boundaries or else change those boundaries to accommodate housing demand."


SOAR [Save Open space and Agricultural Resources] was the 1998 county initiative limiting new home construction.


Fulton said Ventura County will "run out" of residential land before SOAR sunsets in 2020. Demand will exceed supply over the next three years by 60,000 homes, he said.


Because of the tight single family housing market, apartment rents remain high. Thousand Oaks has the county’s highest average rent at $1,298 a month.


While the Bay Area economy has been hit hard by the dot-com bust, Southern California remains resilient because of an up tick in defense and entertainment spending, Connell said. Film producers who left Los Angeles for greener pastures in Canada have returned because of a travel scare from the Sept. 11 terrorist attacks.


Connell said the state’s recession is "momentary" and "nowhere near" the extended recession of the early 1990s.


"We believe we are in a V-shaped recession in California and the bottom occurred in December … People still come to California looking for the dream, so when the rest of country begins tanking people come west."


Schniepp, a consultant to Connell, said that while the Ventura County economy remains healthy overall, he anticipates "sluggish" business activity until mid-year.


"We expect a slowing of the principal indicators of economic activity including job growth, per capital income growth and consumer spending," Schniepp said. "The spending will be felt most acutely in the retail sector."


The county’s non-farm employment figure is on the decline for the first time in five years, according to Schniepp’s report.


Connell said California would lose 80,000 jobs this year and that the loss in income tax revenue will be devastating to the state budget. She said the so-called "white collar recession" has lopped $1.3 billion off January receipts alone.


The biggest culprit has been Silicon Valley, which accounted for 70 percent of the state’s budget surplus last year. Because of the tech meltdown, California’s budget now faces a $12 billion shortfall.


Capital gains will provide only 7 percent of the state’s tax revenue, the controller’s office predicts, down from 30 percent the year before.


Connell also said she’d try to protect employee retirement funds in California from another occurrence like Enron. She said employees shouldn’t be "forced to invest" more than 15 percent of their 401K retirement in company stock.


Connell closed her comments by criticizing California’s investment in long term energy contracts, required because of last year’s energy crisis.


"We are paying for energy that we don’t need at prices that are four, five, six times higher than the market," she said. "This is going to be a binder that will shadow California’s economy for the next 10 years."





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