Economist Gives Optimistic Report For Santa Clarita

The Santa Clarita Valley will avoid a severe recession and see stabilization in its real estate market next year, an economic forecaster said. The retail sector, however, will remain shaky as consumers have been shocked by what is going on with bank failures and federal bailouts of the financial industry and are not spending, said Mark Schniepp, the executive director of the California Economic Forecast. Retailers will have a shake-out for the next six months until consumers feel more certain. “They have to feel secure and they don’t,” Schniepp said. The Santa Clarita Valley area is centered around the city of Santa Clarita, with a population of 177,000 residents. Major employers include Six Flags Magic Mountains, Princess Cruises, medical device manufacturer Advanced Bionics, and pharmaceutical company MannKind Corp. A diverse employer base and a housing market that was not overbuilt are two factors that will keep the Santa Clarita Valley from suffering too severe of a recession. The Santa Clarita Valley, like the San Fernando Valley, is not heavily reliant on the construction industry, Schniepp said. The Antelope Valley, in comparison, will suffer more, he added. While there has been a decline in the manufacturing sector, it is broad-based enough to get through the down economy and will eventually get back about 1,500 jobs, Schniepp said. Housing sales are rebounding, with prices falling at a rate of about 30 percent, Schniepp said. In the Antelope Valley prices have dropped 50 percent and 40 percent in Oxnard. The drop in the Santa Clarita Valley’s housing market has probably hit bottom and did not experience a lot of homeowner distress due to foreclosures and notices of default. There were few homebuyers taking out sub-prime loans that have derailed the economy in other parts of the state, Schniepp said. A recovery should be visible by the summer of 2009 with prices stabilizing but not rising until 2010, Schniepp said.