County’s Economy Shows More Strength
The Ventura County economy showed continued strength through March, posting solid home sales and a record-tying low unemployment rate of 3.8%, but some local economists say the area’s expansion is charging ahead at such high speed that they are hoping for a slowdown.
The economy “just keeps on going higher and higher,” said Mark Schniepp, director of the Center for Regional Economic Research in Santa Barbara. “Good news would be if things were starting to slow down. If we could say the [Federal Reserve’s] rate hikes have worked, mission accomplished.”
Schniepp and others looked at this week’s dive in the stock market as a bit of welcome--and not unexpected--news; a correction that may help to slow the economy and return it to a more moderate pace.
Though it may take awhile, the stock market could affect home sales and unemployment in Ventura County in a tangible way, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.
“How is this all going to affect consumer confidence?” he asked. “They’ve been the ones keeping things going.”
And bad news for tech stocks could mean reduced spending by employees of local technology firms and less hiring by the companies, Kyser said, which might bump up the unemployment rate.
Nonetheless, Schniepp said he suspects more--and higher--federal rate hikes are on the way.
The Fed’s most recent interest rate hikes haven’t done much to dampen the housing market in Ventura County: Sales in March were up nearly 11% from the same time last year, and the median price rose about 13% to $252,250.
Last month, 1,600 homes were sold in the county, up from last year’s 1,444, according to a report by La Jolla-based research firm Acxiom/DataQuick. The sales figures include new and resale homes as well as condominiums. The median price is that at which half the homes sold cost more and half cost less.
The interest rate for an average 30-year fixed-rate mortgage was at 7.89% Friday, according to Bankrate.com, which publishes nightly averages based on its survey of nearly 3,000 banks in 50 states.
“Last month was awesome,” said Jim Cox, president of Century 21 Ability Inc., in Camarillo. “Traditionally, the beginning of the year is slower than the rest. If that’s any indication, this year is going to be better than last.”
Cox said that the stock market drop might even help sales, because it could convince the Fed not to raise interest rates further and could also persuade investors to pull their money from the market and put it into real estate.
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The east side of Camarillo experienced the highest sales growth for March, with a 58% increase, to 79 homes sold. Median prices there rose 14.3% to $275,000. Ojai saw the second-largest sales increase with a jump of 35.3%, to 46 homes sold. In Port Hueneme, sales rose 32.3%, with prices up 31.6% to $164,500.
“It feels like there’s a lack of inventory,” said Maria Zendejas, a real estate agent with ReMax Gold Coast Realtors in Port Hueneme. “We’re starting to have a lot of buyers come in from out of the area. Prices have skyrocketed, but they’re still half the price of Santa Barbara.”
Kyser said declines in the stock market should rightly put investors in more of a cautious mood, as gas and energy prices continue to rise. But, housing sales are likely to stay strong, at least for the near future.
“If you find a house and it’s one you like, you better buy it,” he said. “The supply just isn’t growing that much. There’s no reason not to buy a new house in the next month. In a few months, it will be even higher.”
Cathy Sharp of Camarillo understands that logic. She and her husband, Jerry, jumped at a chance to buy their dream house--with four bedrooms, a large yard, a pool and a stone wall in back--the day the sign went up. They agreed to buy the house on a Friday. By Saturday, they had sold their old home.
They feel lucky to have it, despite what they consider bad timing.
“I probably think it’s a terrible time to buy a house,” she admitted. “The interest rates have gone up, and it’s really a seller’s market.”
The Sharps are opting to take a teaser rate on their mortgage for three months, hoping for the possibility that interest rates will drop a bit. If they don’t, she said, they will just refinance down the line.
“It’s a gamble, I know,” she said.
And just as the housing market is red hot, the county’s 3.8% unemployment rate in March was at a low point not seen in 15 years. It ties a previous low from May of last year, said Dee Johnson, an analyst with the Employment Development Department, which released the report. In March of 1999, the unemployment rate was 4.4%.
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The county added about 5,000 jobs in March, mostly in farming, where employment is fluid and largely follows seasons and harvesting. The nonfarm sector grew by 1,100 jobs to reach 269,300, with the service sector leading with 500 new jobs during the month. The government and construction sectors added 200 jobs each over the same period.
The nonfarm growth rate year to year was a healthy 4.5%, with 12,700 more jobs than the same month last year.
About 389,100 Ventura County residents are employed locally or elsewhere, up from 386,900 in February, according to the state’s figures. Ventura County’s unemployment ranked 13th lowest among the state’s counties.
And despite stock market worries, most economists think this growing economy will last a bit longer, if only for the short term.
“With the lag, the short-term outlook is not bad,” said Bill Watkins, an analyst with the UC Santa Barbara Economic Forecast Project. “This expansion has withstood a number of hits already. One of the amazing things about it is it just keeps withstanding them.”
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STOCKS TUMBLE
Inflation report casts shadow over economic performance. A1,C1
* LOCAL BROKERS’ ADVICE
Area brokers fielded questions from worried investors. B5
