O.C. job growth will slow, housing prices will climb, Chapman economists predict

After several years of strong gains, Orange County’s job growth is expected to rise at its lowest level since the recovery began in 2009, according to Chapman University’s annual Economic Forecast Update.

The private university in Orange is predicting a 1.5% bump, less than half the 3.2% growth posted in 2015.

Unemployment, however, should remain low, at 3.2%. That figure, considered nearly full employment, is expected to remain steady, the school predicts.

The faculty of the Gary Anderson Center for Economic Research attributes the trend to a diminishing construction labor market, which otherwise had been a “major engine of growth” over the past five years.

“New entrants to the labor force may add to the supply,” Chapman economists said in a news release, “but that doesn’t look promising, given the projected graying of Orange County’s population.”

Chapman economists noted that aging residents of Orange County are expected to take up a bigger percentage of the population in coming years, which could harm the labor supply, as younger workers leave the county — and state — for more-affordable housing markets.

In 2015, the county had about 434,000 people ages 65 and older; in 2020, that number could jump by about 23%, to nearly 536,000.

That figure is a significantly higher uptick than traditionally working-age people — defined as 15 to 64 — whose population numbers are expected to rise in O.C. by only about 1% between 2015 and 2020.

Chapman also predicted another strong year for the real estate market, with housing appreciation at 6.2% for 2017.

During a presentation of Chapman’s forecast June 21 at the Musco Center for the Arts, economics professor and former Chapman President Jim Doti didn’t predict a pop of the housing bubble this year, but noted that pricing has reached “an irrational level,” with the median home price some eight times higher than the median family income — well above both the ratios both nationally and in California.

Still, Doti, added, “We are in a balloon. No question.”

bradley.zint@latimes.com

Twitter: @BradleyZint