The A. Gary Anderson Center for Economic Research released an updated economic forecast for 2017 at the Musco Center for the Arts in Orange, CA. Dr. Jim Doti, president emeritus of Chapman University, presented information on the Nation, California, and Orange County.
U.S. Forecast: This is one of the longest recoveries on record at 8 years! With moderate inflation of 1.7% the Fed will not aggressively raise interest rates. Real GDP will grow at 2.3% in 2017, up from 1.6% in 2016. Nationally housing starts for ‘17f is at 1,302,300 units.
California Forecast: California’s home price-to-income ratio is currently 5.8 with the nation’s at 3.3. What’s the major cause of California’s housing affordability problem? The supply of unsold resale homes is below the average of 5.1 months plus higher mortgage rates are increasing home appreciation to 6.5% in 2017 from 5.5% in 2016. Silicon Valley is the a major variable swinging the CA forecast. Silicon Valley’s incredibly high housing prices are causing substantial job losses in the tech information sector because employees are relocating or choosing to live/work in other tech hubs throughout the nation with more affordable housing.
Orange County Forecast: OC is nearly at full employment with a 3.2% unemployment rate. Without a major job sector increasing job growth, the 2017 forecast for overall Orange County job growth is 1.5%; the slowest rate of growth since the recovery began in 2009. Housing appreciation is forecasted at 6.2% for 2017. OC will produce enough housing units to bring down population housing density from 2.93 people per housing unit in 2015 to 2.87 people per housing unit by 2020. Median DOM is a lead indicator of housing prices dropping and the current trend does not reveal a bubble bursting in the near future. Orange County’s median SFR home price is forecasted to be $792,593 by Q4 with a price-to-income ratio currently at 8.6. The “graying” of OC’s population is a source of concern because the 65+ market will not contribute to future employment and OC’s expensive real estate might just be traded back and forth among these baby boomers. Is there a solution? Doti unveiled his OC vision of a “pro-tech beach hub” to recover and stimulate job creation, leading to increased salaries for people to afford the high real estate prices.
2017 Economic Forecast Update Press Release
The A. Gary Anderson Center for Economic Research released an updated economic forecast for 2014 and 2015 forecast at the Segerstrom Center for the Arts in Costa Mesa, CA. Dr. Jim Doti and Dr. Esmael Adibi from Chapman University presented information on the nation, California, and Orange County. “The forecast calls for real GDP growth to surpass three percent in 2015—the first time that has happened on an annual basis since the recovery began in 2009. ”
- Household wealth is at its highest level ever, above $80 trillion
- Construction of new homes has served as an engine of growth for the economy
- Median resale SFR prices are forecasted to increase by 4.1% in Orange County for 2015
Read the June 2014 Forecast Press Release Here
Many parts of Orange County including areas inland are amazing places to buy real estate. Excellent neighborhoods are scattered across OC from turnkey condos ideal for business travelers to homes perfect for raising a family. I was surprised to hear recently from Curt Pringle, former Mayor of Anaheim, that Orange County has 34 incorporated cities. I knew Orange County houses around 3 million+ people and about 1 million are Catholic, but 34 was such a large number. I did not want to Google the list, so I counted the cities to test my knowledge. Check out the list here. Which city is your favorite? If you need some more time to decide, just keep calm and go to the beach.
I typically discuss coastal real estate because luxury homes have been my focus over the years. Most of these homes are closer to the Pacific Ocean translating into a higher price point due to the limited supply of prime real estate or land near the beach. The temperature along the coast hovers between 60 to 70 degrees and most days showcase a view of Catalina Island. I’m also happiest at the beach, so real estate by the beach works well. One of my favorite questions to ask friends and clients is, “Do/would you prefer to live beachfront or up in the hills with a spectacular ocean view?” Still not sure which you would pick? Imagine you hit the Lotto and had an extra $15M to spend, then select your answer.
It’s that time of year again… the entertaining and informative Chapman University Economic Forecast presented by Dr. Jim Doti and Dr. Esmael Adibi. The annual forecast is held in December and the update takes place in June. More than 1,000 business executives gathered at the Segerstrom Center for the Arts in Costa Mesa, CA. Through complex econometrics the A. Gary Anderson Center for Economic Research analyzes and predicts what will happen in the nation, California, and Orange County. I’m happy to report things are improving in Orange County according to the economists.
Positive highlights for Orange County include:
2014 median annual household income projected to be $88,800
Price of a median-single family home is forecasted to increase by 8.8 percent according to the California Association of Realtors®
- Addition of 32,000 jobs in Orange County by the end of 2013
- OC job creation increased 2.3% in 2012 and was spread over multiple sectors
Read the full forecast here:
Pelican Point is a prestigious guard gated community on the ocean side of PCH in Newport Coast, CA. This is my favorite community in Orange County. Many residents have golf course AND ocean views! Living on the golf course is quite impressive because Pelican Hill’s 36-hole golf course was designed by Tom Fazio and was ranked #1 in the world in 2012 by Condé Naste Traveler Magazine. The two courses are Ocean North and Ocean South with the South course framing Pelican Point. The community of 55 glamorous estates rests between Laguna Beach and Corona Del Mar. It offers convenient access to Pelican Hill Resort, Fashion Island, Crystal Cove shopping promenade, Balboa Island, Balboa Bay Club, and more. The Mediterranean style mansions range from $5 – $16 million with some estates on double lots and/or oceanfront lots. Many homes have subterranean parking, 5,000+ sq. ft. and an elevator. The homes were built from the 90’s on with a limited number of vacant lots that may come up for resale in the future. The community offers private access to Crystal Cove beach, an ideal place to stroll along the sand during sunset or an easy walk to the Beachcomber Cafe to dine alfresco. The 24-hour guard gate keeps a tight rein on all entrants and even has the guards wearing dashing safari-style uniforms.
Benefits of living in Pelican Point, Newport Coast include:
- Oceanfront guard gated community
- Developed community with limited new construction
- Custom homes
- Newport Mesa Unified School District
- Private beach access
- Magnificent coastal views
- Ideal for golf carts
- HOA under $600 per month
Corona Del Mar, CA is located on the south end of Newport Beach. While navigating your way through CDM, you’ll notice the streets off PCH are named after flowers. The best part is they are also in alphabetical order! The Flower Streets start at Acacia and go to Poppy. CDM is very charming and the homes are beautiful! Take a walk near Big Corona and admire the incredible custom homes. Homes to the North of PCH and those in the South (closer to PCH) are mainly duplexes with a front unit and back or upper unit. Back units are the 1/2 addresses such as 205 1/2 Jasmine. Many homes closer to the Ocean have been remodeled or rebuilt into beautiful estates. If you are looking to buy a home in CDM, please email me. If you are looking to lease a home in CDM, my advice is to drive or even walk through the neighborhood, termed “The Village,” to find a For Lease by Owner sign. Most of these homes go quickly due to the high demand. The Village is an ideal area because of the proximity to the beach, restaurants, the new Port movie theater, boutiques, PCH, and Fashion Island. Also search on Craigslist.com if you are looking for a lease. Some owners will list their home for lease using a real estate agent, so always seek advice. Realtors® may also know of pocket listings to give you an edge over the competition.
9.1 sq. miles of incredible living boasting 7 miles of breathtaking coastline. Home to around 23,000 residents, Laguna Beach is one of the top places to live and visit. One of my favorite things to do in Laguna Beach is First Thursdays Art Walk held monthly in dowtown from 6pm-9pm. The Summer months are truly the best time to check this out because the weather is phenomenal and the city is so vibrant. Tour over 30 art galleries for free, drink complimentary wine, and enjoy the ocean air. Hop on the free Laguna trolley to navigate between the North, Central, and South galleries.
If you live in Orange County, you MUST experience Laguna’s famous Pageant of the Masters held in a starlit amphitheater from July 7 through August 31, 2013. Art comes to life as volunteers step inside famous paintings and sculptures. The 90 minute larger than life show features a live orchestra and a somewhat humourous narrator. Make dinner reservations in dowtown Laguna before the show then tour the Festival of Arts to see the works of 140 local artists before showtime at 8:30pm. Remember to bring your binoculars (or rent them there) to see if the people blink and dress warmly as it does get chilly in the evening. It will be a night you will always remember!
Benefits to living in Laguna Beach include:
- Laguna Beach Unified School District
- Boutiques & specialty shops
- Hiking trails
- Aliso Creek Golf Course – 9 hole course with ocean views
- Delicious restaurants – dine alfresco with ocean views
- Top resorts
- Art galleries
- Picturesque beaches – take exquisite photos!