January 22, 2023
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Schniepp: Outlook calls for robust housing recovery, modest job gains


Expect home prices to continue to rise and slow job-growth gains in Ventura County next year.

That was the outlook from regional economist Mark Schniepp of the California Economic Forecast, speaking at Hyatt Westlake Plaza in Thousand Oaks on Sept. 19.

Tracking trends at the statewide level, Ventura County will see more housing starts, retail growth and moderate job gains through the end of the year and next year, he said. Population and spending growth rates are expected to stay about the same, according to Schniepp.

For California as a whole, technology growth in soft sectors such as mobile and web development and software will lead the way. Manufacturing will see small gains but mostly in terms of output, not employment, as sophisticated machines replace workers in many industries.

“Demographics and microprocessors” are largely to blame for the Golden State’s persistent high unemployment rates, Schniepp said. “Any job that is mundane, repetitive or codifiable can be done by robots or microprocessors.”

On the bright side, the housing market has been making a solid recovery.

Wells Fargo Senior Economist Mark Vitner, also speaking at the event, said that while the recovery in the residential real estate market has thus far been driven by investors and institutional buyers snapping up assets, it appears that homeowners have also started to buy again, pointing to a “real recovery” in single-family housing.

Vinter said the California economy is doing well in some areas, especially in hospitality and technology. The recovery has been led by Northern California, with the southern part of the state only recently catching up. By some indicators, the Central Coast is leading the way.

The state’s technology sector is not being driven by hardware, Vitner agreed. “It’s mobile devices, cloud computing and app development,” he said. “It’s those knowledge-based industries. That’s where California excels.”

Schniepp said with population gains statewide and many new households forming, demand for new housing will certainly be there. Whether there’s actually new residential construction to meet that demand will depend on factors including the availability of financing and development policies in local areas.

Moorpark, Simi Valley and the Conejo Valley are experiencing near-business-cycle-highs for home sale volume, he said. But in Ventura County, there are about 22,000 new homes in the entitlement pipeline, he said, which represents only about seven years worth of supply. “We need more housing,” he said, with the homebuying population expected to increase steadily at least through 2020.