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| Press Release |
UCLA Anderson Forecast's Outlook for San Diego County
Recession for Most of 2009 with a Recovery in Housing Market
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LOS ANGELES, May 15, 2009 - The UCLA Anderson Forecast today released its
annual economic forecast for San Diego County. The Forecast states the official
end month for the national recession is likely to be early in the second half of
2009, and the worst of the problems for San Diego will then be over. The
unemployment rate for the nation and San Diego is likely to continue to elevate
until growth becomes strong enough to absorb new entrants into the labor market.
“As the U.S. and California economies continue to contract, San Diego’s unemployment
rate will grow to 10.3% in 2009. The deterioration in the local economy is led by
growing layoffs in non-residential construction, manufacturing and retail jobs,”
said Jerry Nickelsburg, senior economist, UCLA Anderson Forecast. “But there is
light at the end of the tunnel. A forecast turnaround in the U.S. and California
economies later this year should begin the recovery process in San Diego by the end
of the year.”
Because 2009 will be a rough year for California, which has larger intrinsic problems
than the nation, the San Diego County economy will remain weak. The commercial real
estate markets have softened along with the labor markets, and more problems with
refinancing this year could weaken the office market even further.
Residential real estate is poised to recover in 2009. Sales of homes have soared in
the county and values appear to have stabilized. Both new inventory of homes and
foreclosure inventory are currently on the decline.
“As long as homeowner distress does not rebound and recent federal government programs
designed to avert foreclosure have some success, a more conventional recovery in the
residential sector should be underway this year,” said Mark Schniepp, author of the San
Diego forecast report. “By mid to late 2010, the recovery of the broader San Diego
County economy should be more convincing and 2011 will be a year of above average
economic growth including job and income creation.”
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