Beacon Economics, LLC has made a name for itself as an independent research and consulting firm with a keen sense of California economic fundamentals. In its just released Winter 2019/2020 forecast, Beacon outlines that with increasingly tight labor markets and historically low levels of unemployment for five of California’s major metropolitan economies, fundamentals are relatively healthy. However, the state’s low supply of homes and sluggish building activity are keeping up the pressure on home prices and rents. Key overviews for the five reported regions?
Los Angeles – Despite growing at a slower annual pace in October 2019 than California’s other major metropolitan areas, Los Angeles County continues to add a substantial number of jobs to its massive employment base. Additionally, multifamily construction activity in the region continues to grow above trend, while the single-family construction market remains lackluster.
San Francisco – Strong employment growth in San Francisco has become almost mundane in its regularity, continually outpacing the rest of the state. However, tight inventories in the residential housing market remain a problem as new units are quickly being absorbed into the market.
East Bay – The East Bay economy advanced further in the third quarter of 2019 as the region’s unemployment edged down and job growth picked up. Despite mortgage rates trending down over the year, home sales have yet to react and remain in negative territory
South Bay – With the smallest employment base relative to California’s other major metropolitan areas, the South Bay continues to experience steady labor market expansion. However, despite home price appreciation contracting in recent months, homeownership is still out of reach for many in the region as home prices remain near record highs.
San Diego – San Diego County’s employment growth has held steady as the region’s largest employing sectors continue to bolster their payrolls. In the regional housing market, home price appreciation continues to moderate, while home sales show signs of life.
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