May 15, 2009
UCLA Anderson Forecast's Outlook for San Diego County: Recession for Most of 2009
California residential real estate market expected to begin recovery in 2009
LOS ANGELES -- 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."
About UCLA Anderson Forecast
UCLA Anderson Forecast is one of the most widely watched and often-cited economic outlooks for California and the nation and was unique in predicting both the seriousness of the early-1990s downturn in California and the strength of the state's rebound since 1993. More recently, the Forecast was credited as the first major U.S. economic forecasting group to declare the recession of 2001. Visit UCLA Anderson Forecast on the Web at http://uclaforecast.com.
About UCLA Anderson School of Management
UCLA Anderson School of Management, established in 1935, is regarded among the leading business schools in the world. UCLA Anderson faculty members are renowned for their teaching excellence and research in advancing management thinking. Each year, UCLA Anderson provides management education to more than 1,700 students enrolled in MBA, Executive MBA, Fully-Employed MBA and doctoral programs, and to more than 2,000 professional managers through executive education programs. Combining highly selective admissions, varied and innovative learning programs, and a world-wide network of 36,000 alumni, UCLA Anderson develops and prepares global leaders.
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