A growing job market and strong demand for space will largely insulate North L.A. County from the region’s slowing real estate market and readjusting economy, according to a 112-page analysis of the area’s business climate released this month. “The last three years have been prolific,” said Dr. Mark Schniepp, author of “The 2007 Santa Clarita Valley Real Estate and Economic Outlook.” “That’s what’s been the driving component of this valley’s economy.” The findings were presented Nov. 9 by the Santa Clarita Valley Economic Alliance at a morning conference at the Hyatt Valencia. The two-hour event also featured Christopher Thornberg, principal and founder of the L.A. research and consulting firm Beacon Economics, who provided a broad synopsis of the California and U.S. economy, and Parker Kennedy, chairman and CEO of Santa Ana-based title and financial services company The First American Corp. But the main focus was an analysis of the study, which was largely based on numbers from the first nine months of the year. Schniepp, director of the Santa Barbara-based California Economic Forecast, painted a mostly healthy picture of the Santa Clarita and Antelope valley economies, which he said are well positioned because of an extraordinary amount of diverse job growth in recent years. The total wage and salary jobs for the Santa Clarita Valley are expected to increase by 4,500 additional jobs during 2006, mostly centered on retail trade (up 1,180 jobs), construction (683) and hospitality (573). Even manufacturing jobs which elsewhere in the state have decreased (including a 2 percent drop in the San Fernando Valley, according to a recent study) added 389 new positions. The increasing number and diversity of jobs being created far steeper than in the rest of L.A. County has touched off growth in nearly every aspect of the economy in the Santa Clarita and Antelope valleys, Schniepp said, from retail and housing to demand for industrial and office space. “It’s giving us a very good and stable foundation,” he said. Vacancy rates for the Santa Clarita Valley’s 21 million feet of industrial properties totaled just 4.57 percent, a historic low for the region, while office vacancy was 5.0 percent and retail was 3.8 percent. One sector not benefiting from the new jobs is the residential sector, which Schniepp described as in the middle of a “real estate correction.” Hardest hit was new home construction, which this year plummeted 81.1 percent in Santa Clarita Valley and 63.4 percent in Antelope Valley from 2005. Also feeling the heat were existing home sales in the Santa Clarita Valley, which tallied 5,500 in 2005. The study determined that number is expected to drop to 3,300 homes for 2006, a 40.2 percent decrease. Despite fewer homes being sold, however, home prices are holding steady for now. The average cost of a home in the Santa Clarita Valley in 2006 is expected to total $648,788, a 10.1 percent increase from 2005, according to the report. Overall, existing home sales will drop an estimated 18.9 percent in North L.A. County while the cost for a house will increase 11.3 percent, the study determined. Schniepp explained the trend is rooted in homeowners with for-sale properties waiting it out for better offers as buyers hold out for the market to become more affordable. “So they are going to sit there for a while,” he said. “It’s a stalemate.” Added together, Schniepp said, the stumbling housing market is expected to take years to recover, but not long enough to hamper overall economic health of the region. “We don’t think this downturn in place will hurt us, mainly because we don’t have those other elements in place,” he said. “There’s not enough weakness.” Population Forecast, North L.A. County 1999: 493,451 (1.19 percent change) 2000: 500,909 (1.51 percent change) 2001: 513,201 (2.45 percent change) 2002: 526,526 (2.60 percent change) 2003: 540,977 (2.74 percent change) 2004: 556,052 (2.79 percent change) 2005: 568,971 (2.32 percent change) 2006: 585,358 (2.88 percent change) 2011: 655,155 (forecasted) Source: The 2007 Santa Clarita Valley Real Estate and Economic Outlook Santa Clarita Valley Vacancy Rates Office: Q3 2005: 2.8 percent Q3 2006: 5.0 percent Industrial: Q1 2005: 6 percent Q3 2006: 4.57 percent Retail: Q3 2005: 3.59 percent Q3 2006: 3.80 percent Source: The 2007 Santa Clarita Valley Real Estate and Economic Outlook
