Influx of young professionals could drive Ventura County housing market
Despite a record drought, short-sighted policy making and a slow-to-start generation of self-established young workers, the outlook for Ventura County is bright.
“It should be another year of expansion — you pretty much count on that — and no recession in sight, at least not yet,” said Mark Schniepp, director of the California Economic Forecast. “There should be more hiring, especially of skilled workers, rising salaries for those workers and a second recovery of the existing housing market at some point. However, that really depends on how long households take to form.”
That was the view from Schniepp and other business leaders at the California Economic Forecast’s outlook for the county. The event was held at the Hyatt Westlake Village on Sept. 11.
Professional services, health care and hospitality are expected to lead job creation in Ventura County, Schniepp said. Although the momentum from 2013 has slowed, the current pace of new hiring in Ventura County could see more than 4,000 new jobs added to total payroll employment, according to data from the forecast report.
Employment in Ventura County’s construction industry is fairing better this year, led by new housing projects and renovation of existing stock.
One major caveat that could impact overall job gains in the county is biotech giant Amgen’s announcement earlier this summer that it will cut up to 2,900 jobs at its U.S. operations. However, Schniepp said that any Amgen layoffs around the company’s Thousand Oaks headquarters would likely be gradual over the next 12 to 18 months and wouldn’t drag too much on overall job gains in the county.
Schniepp also factored changing demographics into his outlook. The number of Ventura County residents who are in their 20s is at an all-time high, he said, and overall the size of the generation is expected to peak in 2018. That should continue to push up demand for rental housing in coming years, he said, although the apartment vacancy rate has already hit a cyclical low. The development of new housing has been “abysmal” in the county for last six years, Schniepp said, but the winds are changing for that effort. The current pace of housing starts could produce as many as 1,250 new permits this year, with demographic changes driving the demand for more apartments.
The housing market could emerge as a major engine for growth, he said, although thus far it hasn’t done much for the county’s payrolls. “[Housing] has the potential to postpone another recession and prolong the expansion,” he said. “If 20-to-30-something populations start to rise and get out of their parents’ homes, find rental housing or potentially become first time home buyers, it could make an impact. It hasn’t contributed much in the last five years.”
With net migration numbers for people moving into the county — primarily from L.A. County — positive over the last few of years, at least 2,000 housing units annually are needed to handle the anticipated 38,000 new residents entering the county over the next five years, Schneipp said. With those additions, the job market is expected to tighten and in turn drive up wages in some sectors.
While the long-term effects of the drought — which has affected coastal regions of California less than the Inland Empire — and rampant geopolitical unrest across the globe could pull the plug on overall growth, investors seem immune at this point, Schniepp said.