Housing costs, migration expected to crimp Southern California’s economy

Southern California’s economy remains strong, but it’s expected to lag slightly behind the state through 2021, according to a new report.

As with other regions, housing affordability and a net migration inland pose challenges to growth and the efficient movement of people and goods, the Los Angeles County Economic Development Corp. forecast said.

On the plus side, per capita income growth is expected to continue to outpace the nation and state, buoyed by strong employment in the construction, logistics, professional services and healthcare industries.

Shannon Sedgwick, director of the LAEDC’s Institute for Applied Economics, which prepared the report, said the region has definite challenges.

“We have housing issues and a declining population,” she said. “With a decreased labor pool productivity remains low and that makes future economic growth difficult to achieve.”

Regional investment

Long-term regional investments in transportation — most notably the Southern California Optimized Rail Expansion — will help boost growth in the area, the report said. The $10 billion capital improvement program, which runs from 2018 through 2028, includes track additions, station improvements and better signals and grade crossings to improve safety where trains cross surface streets.

It’s projected to generate 1.3 million jobs and provide a $684 billion boost to Southern California’s economy.

The forecast expects the regional economy to expand by 1.8% this year and next year, well below the more robust growth the region saw in 2018 (3.1%), 2017 (3%) and 2015 (4.6%).

The biggest job gains

Southern California is expected to add 129,800 jobs this year and 128,300 in 2021. This year’s biggest employment gain of 52,500 jobs will come in education and health services, the report said, with other sizable increases in leisure and hospitality (20,600), professional and business services (18,900) trade, transportation and utilities (13,200) and construction, natural resources and mining (12,100).

Sedgewick noted that, while the region’s overall economy is still relatively good, many Southland residents are not earning a living wage.

“Twenty-five percent of households with children in L.A. County are receiving some form of public assistance,” she said.

Home values are out of reach for many and will continue to climb, largely as a result of the region’s limited inventory. Southern California’s median home price — the point at which half the homes cost more and half cost less — is expected to reach $593,111 this year, up from $589,249 in 2019, and it will rise to $606,649 next year, the report said.

The forecast also breaks out highlights for each county:

Los Angeles County

  • Economic expansion: 1.8% this year and 1.6% in 2021
  • Employment growth: 48,400 this year and 42,200 in 2021
  • Unemployment rate: 4.3% this year and 4.1% in 2021
  • Median home price: $658,339 this year and $674,463 in 2021

Orange County

  • Economic expansion: 1.7% this year and 2% in 2021
  • Employment growth: 16,200 this year and 19,600 in 2021
  • Unemployment rate: 2.7% this year and 2.6% in 2021
  • Median home price: $745,385 this year and $764,271 in 2021

San Bernardino County

  • Economic expansion: 2% this year and 1.8% in 2021
  • Employment growth: 15,000 this year and 15,200 in 2021
  • Unemployment rate: 3.9% this year and 3.8% in 2021
  • Median home price: $380,640 this year and $394,179 in 2021

Riverside County

  • Economic expansion: 2.3% this year and 2% in 2021
  • Employment growth: 13,600 this year and 12,100 in 2021
  • Unemployment rate: 4.3% this year and 4.2% in 2021
  • Median home price: $390,548 this year and $403,761 in 2021

The report defines Southern California as a 10-county region that includes Los Angeles, Orange, San Bernardino, Riverside, San Diego, Ventura, Santa Barbara, Imperial, Kern and San Luis Obispo counties.

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California’s economic power may surprise you

California’s economy is bullish. In fact, it’s huge on a global scale. But its parts, the county-by-county economies that make up the Golden State’s business muscle, are quite large, too. Fresh federal stats for 2018 give a glimpse of this heft: California is home to 14 of the nation’s 100 largest county economies, when measured by a key business output metric — gross domestic product.

California’s total output

$2.72 trillion

Output ranking

Here’s a comparative look at the output ranking of each county, its top growing sector, growth rank among 100 largest U.S. counties, and its equivalent to other countries.

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Resolutions for a new decade: 12 trends to watch, or ignore

Somehow, 2020 is the start of my *sixth decade as a journalist.

Not sure if that makes me “grizzled” or “old-fashioned” or simply a “dinosaur,” but the calendar’s yardstick got me thinking: How does one keep their professional edge in an age where useful news gets lost in a nasty mixture of low-value, anger-inducing noise.

It’s an era when a brief financial swing or a single corporate move or one freshly minted data point can be blown up into an oncoming economic turning point of monumental proportion. Yet all-too-frequently, that news is actually more blip than a beginning.

Such hyper-analysis won’t help anybody make smart decisions. Nor is it good for anybody’s nerves.

So I’ve crafted some ideals I’ll try to stick to in the coming years. It’s sort of my professional resolutions for a new decade. These mantras are designed to keep my work, and the trusty spreadsheet, hopefully, pointed in the proper direction. But let me suggest it could also serve as a guidepost to how you could be a better consumer of economic information.

1. Ignore short-term gyrations

Plenty of pundits, not to mention the financial transactions industries, love to talk about the ups and downs of the day or week or month or even a quarter. Short-run swings feel far more interesting than slow-brewing, solid trends. However, what’s fodder for happy hour or a social media post often isn’t truly actionable information.

Note that in a decade when Dow Jones Index nearly tripled, Wall Street’s venerable benchmark declined on 45% of its trading days. l resolve to focus on longer-term trends.

2. No trend lasts forever

After living through the nation’s first decade without a recession, it’s easy to forget that dips happen. Not that the next downturn will be soon. Or that whenever a reversal occurs will it definitely be a massive decline. But the chance of disappointment should be on the radar.

I resolve not to forget that many of the business concepts succeeding in arguably one of the better economies in the history books may not have the durability to last the next downturn.

Like, how many poke bowl places does the world need?

3. Bad news sells

It’s a journalism truism for centuries that flies in the face of economic history. You know, the ups and downs of the business cycles. For example, portraying current economic conditions as poor — or worse — may get the buzz. But are today’s challenges anywhere near the Great Recession’s pain? Not that blind optimism works well, either.

I resolve to see the good — and the bad — and tell the difference as best I can … all the while knowing all too well which brand of news draws more eyeballs.

4. California vs. Texas is dumb

This battle of the nation’s economic titans is great theater, both from a business and political sense. And I’ll admit I’ve written too much about the tussle. Why? Because the nation’s most challenging economic problems are outside the borders of these states.

In the past decade, California and Texas collectively created 6.1 million new jobs. That’s 28% of all new jobs created nationally in two states with only 20% of total U.S. employment.

5. Jobs matter

Any discussion about economic opportunity doesn’t go far if there isn’t job creation. Yes, one can debate the quality of jobs that have been created since the Great Recession. But new jobs give people the potential to afford the daily basics, plus, if fortunate enough, some nice things, too.

“Needing two jobs to pay the bills” happens more frequently in good times because there’s a plentiful opportunity to score an extra gig. And I resolve not to forget that jobs offer financial and psychological positives. Oh, and multiple jobholders nationwide peaked in the 1990s.

6. “Affordability” is mis-quantified

Just because somebody can craft a benchmark suggesting in a powerful tone who can afford what, real estate-wise, those yardsticks are of little use to a typical house hunter.

Many who want to own will make the sacrifices required, no matter what some “home affordability” index says. And I resolve to track the many financial variables that create ownership opportunities.

For example, California’s typical home costs 172% more since this century started, by the math of one federal index. But when you account for cheaper mortgages and inflation, a buyer’s house payment is theoretically up only 13%.

7. Guru fatigue

Bravo to those pundits who saw the housing bubble coming. Congrats to folks who predicted an economic revival before others. And a trophy to those who did both.

I send my condolences to those gloom-and-doomers who missed everything over the past decade.

Still, I resolve to eye track records of the opinion-makers — from economists to market analysts to stat jockeys — with a catch: nothing is a more commoditized today than having an opinion.

8. Rankings are simply fun

You’re lying if you have no interest in best/worst lists. I’ve been guilty of covering numerous graded scorecards comparing the economic performance of various regions. Hey, I produce a few of these yardsticks. In their defense, rankings can make economic analysis digestible for those who aren’t numbers geeks.

But ranking beauty is in the eye of the beholder. Take California as a place to live: 14th best state, says 24/7 Wall Street; No. 19 to US News and World Report; and 23rd best by WalletHub’s math. I resolve to remember that most of these best/worst lists are more entertainment than serious economic debate.

9. Mute CEO whining

Industries of all sorts have done a marvelous job in recent years of painting themselves as victims of unfair government interference in the marketplace.

Yes, some regulations make no sense. Yes, governments have been too heavy-handed at times with the economy. Despite this “tyranny,” the value of U.S. public companies managed to nearly triple to $33 trillion this past decade.

I resolve not to forget there is usually reason certain industries are over-regulated: they’re greedy.

10. Beware of personal anecdotes

Your life isn’t economic research. Even finding a handful (or horde) of folks experiencing a trend (or at least saying they have), does not mean that trend is real.

Main Street thinking can be just as ill-informed, if not deceiving, as the mindset of Wall Street, the C-suite or the bureaucracy.

In a fact-challenged world, I’ll keep the trusty spreadsheet humming. Numbers aren’t perfect, but they seem like a most-reliable source.

11. Watch the discounts

Many folks are flush enough today that coupons can seem like an annoyance. But watching the level of discount offered, whether you choose to partake in bargain hunting or not, can give clues to the economy’s next step.

I resolve to stay a vigilant “discountologist,” eyeing the deals merchants offer.

Like, I’m still puzzled at why this holiday season’s discounting seemed a little aggressive. Was it part of a great last stand by brick-and-mortar merchants vs. their online competitors? Or a hint at some economic angst?

12. Humor ex-Californians

People move. Always have. Always will. And Californians rarely move.

But if you want a good bet, assume that at least through the 2020s the state’s “progressive” politics will stick, California will stay an expensive place to live and various challenges associated with most of the world’s densely populated regions will remain.

I resolve to have only minimal sympathies for folks who seem surprised at these California givens, then wish to relocate. Look, the state is supposedly short of housing. Thank you for donating your home.

*Note: I could quibble with my own six-decade math. Yes, technically correct. I started working as a professional journalist at the late, great Pittsburgh Press in June 1979. But, thinking long-run, half a year doesn’t make a decade.

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Redemption Decade: How California’s population ‘exodus’ shrank

With the 2010s at their end, our “Redemption Decade” series explores how California’s economy rebounded from the destruction of the Great Recession. This is Part 4.

Despite all the economic turmoil, Californians remained surprising loyal. Yes, population growth has cooled but don’t blame some mass exodus to other states. The often-cited “net domestic outmigration” data — more moves out than relocations in — actually fell this decade. Here’s how my trusty spreadsheet sets the scene …

Then: In 2009, California’s population grew by 220,982, according to the state Department of Finance, despite net domestic outmigration of 249,652.

Now: In 2018, population grew by 214,625 as 159,421 more Californians departed to other states than came in.

The decade: Through 2018, the decade’s population growth has averaged 305,000 — down 16% from the 2000s. Moves to elsewhere in the U.S. averaged 81,000 vs. 111,000 in the previous decade and 145,000 in the 1990s.

The redemption

Let’s politely say a Californian who doesn’t like it here isn’t shy about departing. State data that dates to 1991 shows more exits than arrivals in 25 of the past 28 years — 1991, 1999 and 2000 are the outlier times when more moved here than left.

The state’s population continues to grow, albeit slowly, due to migration from foreign lands as well as more births than deaths.

But the relocation gap spurs noteworthy emotion. Some critics try to tie the trend to politics, suggesting folks moving elsewhere may be fed up with the state’s progressive agenda, which may have altered California life for the worse.

And while the legislature has been controlled by Democrats for virtually all of the past half-century, in 16 of the past 28 years the governor’s been a Republican. And guess what: Net outflows were nearly three times higher in those “red” years compared with years with a “blue” governor.

So with politics just a poor talking point, my trusty spreadsheet ranked the past 28 years by size of net outflow, then split them into halves — big and little — and weighed the population flows against other economic data. Certain surprising trends emerged.

When California has decidedly more outs than in, it’s a big outflow: an average 216,220 departures over arrivals in the 14 worst years vs. just 14,215 in the 14 best years.

The high cost of living also is a factor. Look at the California Association of Realtors’ homebuying “affordability” index, as one benchmark of how pricey California life is.

This index, gauging how many Californians might financially survive buying the median-priced home, showed 30% of households could comfortably purchase in the worst outflow years. It was 37% when outflows were lowest.

If departure swings are indeed about money, it’s also true for opportunity. For example, California bosses added an average 99,000 in the worst outflow years, less than half the 232,000 hires made when outflow was small.

Poor job prospects in California mean you’re thinking about leaving. But outflows are also about competition for workers. When the grass is greener elsewhere — green, as in paychecks — folks move.

In the years when California has been most likely to lose residents to other states since 1990, the Golden State created just 7% of all new U.S. jobs. When outflow was smallest, California had 16% of all American employment hiring.

So why did the gap between Californians leaving and out-of-staters arriving shrink this decade? Remember the 1990s economy was largely a dud. And the 2000s decade ended with the Great Recession’s harsh thud.

That adds up to bosses statewide adding jobs at a 308,000-a-year pace in the 2010s. It’s a hiring spree triple the average employment growth of the previous two decades.

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Yes, you likely have read that a seemingly big number of Californians go elsewhere. U.S. Census stats show 700,000 in departures to other states in 2018 vs. 510,000 Americans moved in … thus the eye-catching-yet-shrinking “not domestic outmigration.”

Note that 7 million Americans switched states last year. And California is the nation’s most populous state. If you focus on the California exits as a share of its nearly 40 million residents, the departures represent a tiny 1.8% per-capita “loss rate.”

That’s the third-lowest loss rate among the states and well below the rest of the nation’s 2.4% average. And it’s no one-year blip: California has long had a nationally leading “retention rate.”

Conversely, and a decidedly against-common-wisdom trend, is California’s lowly “attractiveness” as a place to which other Americans relocate. Last year’s arrivals were only 1.3% of all residents — DEAD LAST among the states.

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No bubble: Chapman forecasts mild housing rebound for Orange County

Dr. James Doti the former president of Chapman University. (STEVEN GEORGES, CONTRIBUTING PHOTOGRAPHER)

Chapman University economist Jim Doti sees no housing bubble to burst in Orange County.

Yes, countywide homebuying since last summer has run at its slowest pace since 2012. But Chapman’s semiannual economic outlook suggests the county’s housing market will enjoy a mild recovery as 2019 progresses.

Doti’s logic may surprise many people.

For starters, he explains that local housing prices — easily double national benchmarks — are “economically rationale given the county’s higher median income, amenities and proximity to the Pacific coast.”

Plus, housing suddenly looks not so pricey thanks to a sharp reversal in mortgage rates, which have driven borrowing costs down to near-historic lows.

ICYMI: Does California need another crash to create affordable homes?

Doti’s math shows a household buying a median-priced Orange County home in 2018’s third quarter spent 40% of their income to be a qualified borrower. By the end of this year, if the forecast proves true, cheaper mortgages mean the typical local home will cost only 33.6% of income.

However, Doti is by no means projecting any housing boom.

The forecast sees sales of existing homes rising only 1.3% this year, a change of pace from falling 9.7% in 2018. That modest buying uptick will boost the median price by just 1.2% vs. last year’s 4.8% gain.

The recent sales slowdown nudged local developers to cool building plans, a trend that won’t change soon.

Chapman forecasts residential building permit dollars will fall 2.5% this year which is actually an improvement as construction spending fell 13.4% in 2018.

Fewer dollars spent means construction jobs will grow only by 1.2% this year vs. 4.5% in 2018. And those lower mortgage rates won’t help workers in financial services: Chapman expects staffing to be cut by 0.9% this year after dipping 0.4% in 2018.

One reason the Orange County housing market will escape the recent rough patch is that bosses countywide will still be hiring, albeit at a slower pace.

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Job growth is forecast at 1.3% for 2019 vs. 2.1% last year. Increases in personal income will cool, too: 4.5% in ’19 vs. 5.6% last year.

And the moderating expansion will continue to be a drag on another major Orange County purchase: vehicles. Chapman forecasts auto spending will grow just 0.3% vs. 1.1% in 2018.

It should be noted that Orange County is by no means alone with an economic chill.

Look at employment trends elsewhere. The school predicts 1.5% more California workers this year, down from 2% growth last year. Nationally, job growth is pegged at 1.5% this year vs. 1.7% in 2018.

Still, Doti notes significant risks in local housing tied to real estate’s three magic words: Jobs, jobs, jobs!

“There is no question O.C. housing prices will fall more dramatically when we have our next recession,” he says. “The drop in median income caused by the recession will have an exponentially negative impact on prices. But that correction will be temporary and will eventually be ‘corrected’ when incomes increase again.”

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California’s job growth to dip from more robust years, report says

California’s economy is expected to add more than 300,000 jobs this year and in 2020, but that will fall well below some of the more robust growth years the state experienced over the last half-decade.

California will add 322,700 jobs this year and 318,500 next year, the Los Angeles County Economic Development Corp.’s 2019 Regional Forecast and Economic Outlook predicts. By contrast, the state added 424,200 jobs in 2014, 474,000 in 2015 and 427,100 the following year.

On the plus side, California’s average annual income will hit $52,447 in 2020, an annual increase of $7,572 from 2014.

More good news: The state’s unemployment rate is headed down. Last year it stood at 4.2 percent. This year it’s forecast to be 3.7 percent and that’s expected to dip to 3.4 percent in 2020, the report said.

“That will be one of the lowest rates it’s ever been,” said Somjita Mitra, director of the LAEDC’s Institute for Applied Economics.

The demand for housing, particularly in coastal regions of California, is predicted to spur more construction, with a year-over-year increase in permits of more than 8,000 in 2019 and 2020.

But that won’t be enough to meet the demand, according to Mitra.

“It’s still a drop in the bucket,” she said. “We still have a pretty critical housing shortage. We would need 500,000 more homes to meet our population and economic growth — and that would have to include homes that are affordable for people who live here.”

The report also includes economic breakouts for Los Angeles, Orange, Riverside and San Bernardino counties …

Los Angeles County

The county will continue its shift from production operations like manufacturing and logistics to service-based industries, with major growth in professional business services, health care and hospitality.

Major investment in transit will continue to support strong economic growth, although failure to increase residential density along transit routes heavily limits the potential positive impacts.

“One of the big things we are dealing with is traffic congestion and mobility issues,” Mitra said. “It can take a long time to get from one part of L.A. to another. This is a highly desirable market, but there are lots of issues with rules and regulations and height restrictions on how high you can build.”

Orange County

Orange County will continue to see strong economic output, the report said, and higher-than-average education will continue to drive wage growth higher than the regional average, particularly in middle- and high-skilled industries such as business services and healthcare.

Home prices in Orange County are already some of the highest around, and that trend is expected to continue. December figures from price tracker CoreLogic show the median price for a single-family home in the 92606 ZIP code of Irvine, for example, was $930,000, up 4.2 percent from a year earlier. In the 92612 ZIP, it was more than $1.1 million, a 31.4 percent hike from December 2017.

Riverside County

Riverside County’s economic growth should continue, fueled heavily by its role as a key transportation and shipping hub for Southern California. The relative affordability of housing in the region is expected to drive population growth as families move from high-priced coastal regions.

CoreLogic figures show that home prices are considerably lower there than in Orange County. In December, the median price in Riverside ranged from $390,000 to $525,000, depending on the ZIP code.

Riverside County is predicted to lead the region in personal income growth.

San Bernardino County

The region’s importance as a key logistics hub will continue, according to the report, with strong employment and wage growth coming from transportation and trade. But mounting trade tensions with China will likely cause a drag on local growth, the report said.

“We haven’t seen it yet,” said Inland Empire economist John Husing. “One of the first places you’d notice that would be a slowdown in trade through the ports of Los Angeles and Long Beach, but they both just had a record year.”

San Bernardino County added 22 million square feet of industrial net absorption in 2018, most of which is e-commerce related, Husing said. An equal amount of industrial construction is currently underway.

“We’re filling them as fast as they’re being built,” he said.

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Inland economy ranks high in national study

Twelve months of solid job growth pushed the Inland Empire’s economic status closer to the top levels, a study released Thursday by the Milken Institute found.

In the “Best Performing Cities”  study of 200 major metropolitan areas that measured job and wage growth along with the expansion of technology development, the Inland region ranked 15th. That represents a five-point jump from the previous year’s report.

The nonprofit, non-partisan Milken Institute studied job growth for a 12-month period that ended August 20, as well as the five years before that. San Bernardino and Riverside counties had the third-best short-term increase and ranked seventh from 2012 through 2017.

However, the region ranked lower in short- and longer-term wage growth in and the expansion of a technology-based economy. As a percentage of total economic output by the technology sector, the Inland region ranked 131st of the cities studied.

Wage growth slowed

Also, the report cited “extremely low” educational attainment. Only 21 percent of the population over age 25 has a bachelor’s degree or better, compared to 31 percent nationally. That is a factor that has kept Inland wages from growing as fast as the availability of jobs.

“Wages is a long-term concern, and a big part of it is educational attainment,” said Robert Kleinhenz, executive director of research at Beacon Economics and the UC Riverside Center for Forecasting. “It’s a chicken-and-egg issue. Is the mix based on concerns about the workforce, or is it the other way around?”

Provo, Utah, ranking high in job and wage growth, topped the list of the 200 cities. It was followed by San Jose, Austin, San Francisco, Dallas, Raleigh, N.C., Orlando, Seattle, Fort Collins, Colo., and Salt Lake City.

Orange County, LA County lose ground

Orange County was ranked 56th and declined nine slots from the previous year. Los Angeles County was number 81 and fell 20 places.

Many of the high-ranking cities were propelled by single industries. The report cited technology growth traced to Brigham Young University as the main reason Provo topped the list. Tesla’s battery factory pushed Reno, Nev., from 35th-best city last year to number 11.

For the Inland Empire, that main engine was the logistics sector. Milken cited a 140 percent increase in distribution jobs between 2012 and 2017, as well as Amazon’s $4.7 billion investment in 10 fulfillment facilities during a four-year period. This growth has given residents more spending money, which spurred some growth within service sectors.

The region’s universities are producing workers with degrees. “But students tend to look elsewhere for employment after graduation,” the report states.

Kleinhenz said it was important to note that the Inland Empire ranked higher than any metro in California outside of the two Bay Area technology hubs. Several Central Valley cities, such as Stockton, Merced and Fresno, all rose sharply in the study.

“These are points of reference that we use when we talk about how good or not good the Inland Empire is doing,” Kleinhenz said.

The cost of doing business …

The cost of doing business varies from county to county. Kleinhenz said that plays a role not only in Inland growth, but in the recent lack of growth in both jobs and in the workforce, in Orange County. Also, for many workers, it is too expensive a place to live.

Los Angeles County has been trying to fix some of those issues by adding multifamily housing, which may be helping to attract more workers.

“There’s a little more of a dynamic there than in Orange County, but clearly Los Angeles still ranks low,” Kleinhenz said.

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Are builders catching up to Southern California’s housing shortage?

  • The New Home Company, a real estate developer from Aliso Viejo, is moving forward on the Bedford community that will bring 1,620 homes to South Corona. New Home Co. recently announced it will be building homes with TRI Pointe Homes, which will build Citron, 101 townhomes designed by Woodley Architectural Group — two-story, row-style residences from 1,231 to 1,514 square feet with three bedrooms and three baths. Prices are expected to begin in the low-$400,000s. (Courtesy of The New Home Company)

  • The back yard of a Sea Summit home in San Clemente. (Courtesy: Taylor Morrison)

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  • New Home Co. is building 28 new homes in Ladera Ranch. (Sketch courtesy of New Home Co.)

  • Construction workers work on new homes by Seville at Park Place community in Ontario on Monday, May 7, 2018. (Photo by Watchara Phomicinda, Inland Valley Daily Bulletin/SCNG)

  • A SunPower employee completes installation of solar panels at KB Home’s Terramor development in Riverside County. Solar systems like this would become standard at new homes throughout California if state officials adopt proposed new energy standards. “California is about to take a quantum leap in energy standards,” said Bob Raymer, technical director for the California Building Industry Association. (Photo by Will Lester- The Press-Enterprise/SCNG)

  • Bassenian Lagoni designed the Marywood Hills single-family homes that range from 3,800 to 4,400 square feet. (Courtesy: New Home Co.)

  • Workers work on some of the new homes near Newport Road and Murphy Ranch Road in Menifee Thursday, Feb. 22.
    Photo by Frank Bellino, contributing photographer

  • Toll Brothers model homes in Porter Ranch. (Hans Gutknecht, Los Angeles Daily News/SCNG)

  • Front of one of 15 homes offered by Brandywine Homes at its Newbury community in Yorba Linda. (Courtesy: Brandywine Homes)

  • New Homes Co. is building 10 homes in Rancho Mission Viejo. They’re priced at $359,818 and are a snug 700 square feet. The home features just one bedroom. (Jonathan Lansner, Southern California News Group)

  • An artist’s rendering depicts what a town center in one the 4,055-home Mission Village and the 1,440-home Landmark Village, the first two of Newhall Ranch’s nine developments. Project backers expect to take 15 to 20 years to complete all 21,500 homes and 11.5 million square feet of commercial space. (Courtesy of FivePoint Communities)

  • New homes were being built last in the Terramor community east of the 15 Freeway.



Southern California builders are putting a dent in the regional housing shortage, selling new homes at a pace not seen in nine years.

CoreLogic data shows 18,117 new residences sold in the 12 months ended in May across the four counties covered by the Southern California News Group. That’s the best performance since January 2009, and it’s up 7.7 percent in a year.

This means new housing’s share of sales also grows. Builders were responsible for 8.1 percent of all Southern California home purchases in the past year. That’s the highest share of sales since March 2009.

Still, the upswing looks sluggish compared with housing development before the Great Recession.

From 2000 through 2006, Southern California builders were selling homes more than twice as fast as today at a 43,000 units-a-year pace. (Don’t forget one reason for recently modest homebuilding — that last development frenzy ended badly when real estate’s bubble burst.)

Newly constructed housing’s recent surge is a sharp contrast to resales of Southern California’s existing homes, a market that until recently has suffered from limited inventory: 224,296 homes sold in the 12 months, down 2.8 percent in a year and off 4.4 percent from the post-recession peak of September 2013.

And according to ReportsOnHousing, Southern California house sellers are finding it takes two weeks longer to get an existing home from new listing to escrow this summer vs. a year ago.

ReportsOnHousing tracks homebuying patterns found in real estate broker networks: supply (active listings); year-to-date increase in supply; demand (new escrows in past 30 days); and “market time” (a measure of selling speed of days it takes a typical listing to enter escrow).

In the four-county region, the supply of existing residences on the market grew to 33,639 listings July 12 — up 2,738 units for sale in a year or 9 percent. That’s also up 2 percent vs. the 6-year average.

Year to date, sellers have grown the listing count by 9,925 listings. That’s triple the 3,313 added in 2017 in the same period and well above the average increase of 6,635 in 2013-2017.

More choices and slower decision-making mean Southern California’s “market time” — an estimate of selling speed — was at 80 days on July 12, up from 66 days a year earlier and an average 74 days in 2012-2017.

Here’s a look at recent housing data for the four counties — how home sales, new and existing residences, fared in the 12 months ended in May plus how the July 12 supply of existing homes on the market shapes up …

Orange County

New homes: 5,088 sales — above 5,000 for five months, best since January 2007.

Builder’s share: 13.4 percent — above 13 percent for seven months, best since June 2008.

Existing homes: 32,828 resales — down 1.8 percent in a year and off 1.9 percent from the recent peak of October 2017.

Supply: 6,579 listings, up 596 residences for sale in a year or 10 percent.

Market time: 80 days vs. 63 a year earlier and an average 69 days in 2012-2017.

Riverside County

New homes: 4,977 sales — above 4,900 for 33 months, best since March 2010.

Builder’s share: 11.6 percent in past 12 months — eighth month below 12 percent after 31 months above it.

Existing homes: 37,978 resales — off 1.1 percent from recent peak January 2011.

Supply: 8,597 listings, up 859 residences for sale in a year or 11 percent; and up 6 percent vs. six-year average.

Demand: 2,760 new escrows, down 292 sales contracts in 12 months or -10 percent; and down 4 percent vs. previous six years.

Market time: 93 days vs. 76 a year earlier and an average 88 days in 2012-2017.

Los Angeles County

New homes: 4,205 sales — above 4,200 for seven months, best since April 2011.

Builder’s share: 5.2 percent — at 5.2 percent or higher for seven months, best since April 2011.

Existing homes: 76,927 in past 12 months — — off 4.8 percent from the recent peak of July 2013.

Supply: 12,989 listings, up 835 residences for sale in a year or 7 percent; but down 2.7 percent vs. six-year average.

Market time: 72 days vs. 63 a year earlier and an average 68 days in 2012-2017.

San Bernardino County

New homes: 3,847 sales — above 3,000 for 10 months, best since February 2009.

Builder’s share: 11.9 percent — highest since January 2009.

Existing homes: 28,541 resales — off just 0.2 percent from the recent peak set in April.

Supply: 5,474 listings, up 448 residences for sale in a year or 9 percent; and up 6 percent vs. six-year average.

Market time: 81 days vs. 66 a year earlier and an average 79 days in 2012-2017.

Have you checked out Bubble Watch …

Bubble Watch: Are house hunters shying from newly built homes?

Bubble Watch: Is California’s anti-business vibe killing the state’s economy?

Bubble Watch: Home-equity loans back at pre-recession levels

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Does cost of living matter in retirement? Well, it matters when ranking best places to retire

So why do rankings of all sorts often vary widely?

View the creators of all those data-driven rankings like a chef.

Sure, selection and quality of ingredients matters — or, in this case, choosing the underlying economic and demographic stats that build a ranking’s metrics.

But it’s the recipe — how the ingredients are mixed — that can truly impact the final result. You know, a dash here. Or a pinch there.

Take retirement. How the complex concept of personal finances figures into a person’s location choice for their golden years is by no means a set number.

Did you save enough? Are you a heavy spender? What might medical costs be? All are fairly unique parts of any household’s happy-retirement recipe.

But recent, noble efforts of data crunchers at WalletHub, Bankrate and Kiplinger’s to gauge the states in terms of retirement livability factors help show how the statistical mix can alter a ranking’s outcome.

I used my trusty spreadsheet to combine this trio’s retirement rankings in order to give a composite picture of strengths vs. weaknesses. I reassembled their published ranking data — overall scores, subindex grades and related data — into three categories: cost-of-living; character (culture and climate); and care (healthcare and healthiness).

Imagine making the costs measurement doubly as important as the other two metrics. That’s probably good for folks who are carefully watching their retirement pennies.

Florida and South Dakota were the top two. Utah was third followed by Wyoming and Tennessee.

California was the ninth-worst state for retirement when personal budgetary items were given high importance. And New York and New Jersey were worst-to-retire-to states by this math.

On the other hand, there are folks who don’t worry much about money. Perhaps they have generous pensions or saved smartly (or were simply lucky).

Also, note what many studies of retirees’ views on their quality of life after employment reveal. Life’s intangibles — friendships, families, and health — are far more critical to seniors’ happiness than many of factors frequently used to study best-place locations.

So, what if costs weren’t part of the retirement math, just the character of a state and the quality of its senior care?

According to this formula, the top three states shift to Vermont then Hawaii and Maine. Vermont was No. 40 when costs were a double factor.

Meanwhile, Florida and South Dakota fall into a tie for eighth place when costs aren’t part of the recipe. Tennessee drops to No. 40.

And California, minus its well-known high expenses? The 15th-best state for retirees.

Have you checked out Bubble Watch …

Bubble Watch: Are house hunters shying from newly built homes?

Bubble Watch: Is California’s anti-business vibe killing the state’s economy?

Bubble Watch: Home-equity loans back at pre-recession levels

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California ranks sixth-worst state to retire to — or 15th best

California is the sixth-worst state to retire in.

Or 15th best.

That’s the confusing message from three recent state-by-state, best-to-retire rankings based on a myriad of economic and demographic stats.

Data crunchers at Bankrate and Kiplinger’s both ranked California No. 45 among the states for desirability as a place to live out one’s golden years. But statisticians at WalletHub placed California 30 notches higher!

How do you explain the gap? Well, let’s look at how California’s grades varied by those doing the rankings.

Remember, when it comes to rankings, beauty is in the eyes of the grader. My trusty spreadsheet — filled with retirement data and rankings of WalletHub, Bankrate and Kiplinger’s — found that even population counts display a deep statistical divide.

Yes, California has 5 million people aged 65 or older, the largest number of seniors in the nation. Certainly, that means something. But that flock equals only 12.9 percent of all Californias, the sixth-smallest share of 65-plus residents nationally. Are we young? Or unattractive to retirees?

Then look at the ranking divergence when it came to expenses. Yes, California’s expensive … but just how much pricier vs. other states is up for debate.

Bankrate found California third worst for cost-of-living and third-worst for its tax rates. But WalletHub scored California 14th worst for “affordability.” And Kiplinger’s noted California’s 65-plus households had a $65,904 average income, sixth-best among the states.

As for scoring conditions for care for seniors, Bankrate ranked California No. 19 for healthcare quality and No. 14 for well-being. WalletHub gave the state a No. 16 ranking for healthcare. And Kiplinger’s cited average healthcare costs for a retired couple of $430,867. That’s above a national average of $423,523 and 10th highest among the states.

Of course, California “cool” scored well. Bankrate gave the state a No. 14 ranking for the weather, No. 20 for culture, but 19th-worst for its crime. WalletHub ranked the state third-best for quality of life.

California appeared trickier to grade than other states as the three rankings had some agreement on the where-to-retire extremes.

Best states? Well, South Dakota made the top three among each surveyor: For Wallethub it was Florida, Colorado and South Dakota; Bankrate was South Dakota, Utah and Idaho; and Kiplinger’s list was topped by South Dakota, Hawaii and Georgia.

Worst states? New York and Maryland got double dings in the bottom-three grades: Wallethub (Kentucky, New Jersey, and Rhode Island); Bankrate (New York, New Mexico, and Maryland); and Kiplinger’s (New York, Massachusetts, and Maryland).

Here’s how the 50 states ranked in this trio of gradings for retirement quality, listed in alphabetical order …

State Wallethub Bankrate Kiplinger’s
Alabama 41 24 28
Alaska 30 36 42
Arizona 10 29 17
Arkansas 46 46 49
California 15 45 26
Colorado 2 17 11
Connecticut 34 35 20
Delaware 25 19 13
Florida 1 5 1
Georgia 37 37 45
Hawaii 42 11 5
Idaho 8 3 12
Illinois 31 44 46
Indiana 32 22 43
Iowa 4 16 9
Kansas 17 25 23
Kentucky 50 30 48
Louisiana 44 47 50
Maine 23 22 14
Maryland 38 48 41
Massachusetts 19 12 8
Michigan 29 14 21
Minnesota 11 28 19
Mississippi 47 10 36
Missouri 18 15 24
Montana 13 6 7
Nebraska 33 9 22
Nevada 16 42 38
New Hampshire 7 4 3
New Jersey 49 32 35
New Mexico 43 48 47
New York 40 50 40
N. Carolina 28 6 15
N. Dakota 24 20 27
Ohio 20 38 32
Oklahoma 36 40 44
Oregon 26 39 31
Pennsylvania 14 31 16
Rhode Island 48 34 34
S. Carolina 27 41 39
S. Dakota 3 1 2
Tennessee 35 21 30
Texas 22 17 29
Utah 9 2 6
Vermont 39 26 10
Virginia 5 13 4
Washington 21 43 33
W. Virginia 45 33 37
Wisconsin 12 26 25
Wyoming 6 8 18

Have you checked out Bubble Watch …

Bubble Watch: Are house hunters shying from newly built homes?

Bubble Watch: Is California’s anti-business vibe killing the state’s economy?

Bubble Watch: Home-equity loans back at pre-recession levels

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