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Economic Growth To Continue In California’s Regions Through 2019
Job Growth Anticipated To Slow In Most Regions; Home Prices to Rise at Slower Pace
March 21, 2019—LOS ANGELES, CALIFORNIA—Consistent with its forecasts for the U.S. and California, new regional outlooks released today by Beacon Economics describe continued but slower growth in five of California’s major metro areas in 2019. At the same time, home prices are expected to grow more slowly compared to recent years. The housing market is forecast to stabilize in 2019 after responding to lean inventories and rising interest rates through most of last year.
“Given California’s severe housing shortage, the need for more homes has not weakened, but home sales are affected by market conditions,” said Robert Kleinhenz, Executive Director of Research at Beacon Economics. “Mortgage rates have retreated since last year and the supply of homes is considerably higher than it was a year ago, both good signs as we enter the peak season for sales.”
Indicative of the demand for housing, Kleinhenz points to the continued, and in some cases significant, increases in rent that have occurred in every major metro area of the state. Each of the new regional outlooks includes an estimate of what a household would have to earn annually in that area in order to not be rent-burdened; the income needed ranges from $72,880 to $125,120. “These are relatively high income requirements and underscore just how unaffordable many areas of California have become for working individuals and families, even with the wage gains that have occurred in recent years,” said Kleinhenz.
The new outlooks forecast a slowdown, but not a contraction, in job growth across the state’s major urban areas over the next year, as they adjust to slower growth in the national economy and a tightening of metro area labor markets. Industries ranging from construction to health care to arts and entertainment to professional, scientific and technical services have all continued to add jobs and will persist in driving employment growth in 2019.
For complete findings, please view the full reports for the East Bay, Los Angeles, San Diego, San Francisco, and the South Bay/Silicon Valley attached to this email.
Beacon Economics LLC is an independent economic research and consulting firm based in Los Angeles. Learn more at www.beaconecon.com.