Economist Forecasts Steady Growth, but No Boom in Real Estate Market

In the coming year, the city of Long Beach will experience steady but modest growth, economist Joseph Magaddino predicts. But if you’re thinking about buying a house, do it because you want to nest, not because you hope to make scads of money.

Magaddino, chairman of the Economics Department at Cal State Long Beach, and economist Lisa Grobar will deliver an economic outlook for the city, the region, the state and the nation during a meeting today sponsored by the Executive Assn. of Long Beach in conjunction with Cal State’s office of economic research.

“We looked at the nation first, and it looks pretty good,” Magaddino said. “There is steady but modest growth, interest rates are going down, and that bodes well for the region. But real estate is not a good investment and is not likely to be a good investment in the near future.

“There’s nothing wrong with buying a house,” he adds. “There are psychological benefits. Prices have bottomed out and there is modest movement. What’s wrong with buying a house is to expect it will be a good investment.”

In keeping with national trends, Magaddino says, the bright spots in local employment will be in the broad area of business services. Corporate downsizing has contributed to a growing need for jobs in computer maintenance and service, temporary office work and personnel.

He also forecasts growth in Long Beach in international trade and tourism, and says the refurbishing of downtown Long Beach and the construction of an aquarium will help generate additional taxes and retail sales.

Growth in these areas is of particular importance to a city that is no longer reaping huge sums from its oil fields and doesn’t enjoy a strong retail sales base because residents tend to shop elsewhere.

In fact, the amount of money the residents of Long Beach put into cash registers is only 56% of what their neighbors in Los Angeles spend, Magaddino says.

“The nation is currently growing at a little more than 2%,” he notes.

“The region as a whole is growing a little more than 1%. Long Beach is similar to the region. There are positives. Things are getting better. But people are still cautious.”