REAL ESTATE : County to Continue Growing; Fewer Jobs to Be Added This Year

There’s some good news and some bad news for Orange County real estate in a recent survey of the county by an economist at Wells Fargo Bank.

The county’s economy, which generates a gross regional product of $73 billion, is about the size of Arizona’s, the survey said. Thanks to its relatively diverse industries--manufacturing, financial services, tourism and, of course, real estate--the local economy is likely to continue to grow. Still, the recession has hit manufacturing and construction particularly hard, and the county will add only about 2,000 jobs this year, contrasted with 37,000 jobs a year on average in the 1980s.

It won’t surprise most developers to know that, according to Wells Fargo, most types of construction are expected to continue to decline in 1991. During 1990, construction fell a steep 23%, and it’ll be even lower this year.

Office buildings, in particular, are overbuilt and “vacancy rates remain stubbornly high,” says Robert Skinkle, an assistant vice president in the bank’s economics division. At nearly 21%, office vacancies are higher than the national average due to a building boom here in the mid- to late 1980s.

“This, combined with the slowing economy and tight financing environment, indicates that very little new building will take place in the area for the next several quarters,” he says.

What’s ahead? The bank says the county should continue to grow and reach a gross regional product of $108 billion in the year 2000. Per capita income will hit nearly $32,000 in real dollars, the highest in Southern California.

But sky-high housing prices, traffic, air quality and a lack of water will result in slower growth in the county this decade, the bank said. Still, migration into the county should continue strong, the bank said: There’ll be 400,000 more residents here by the year 2000.