LOS ANGELES (Business Wire) -- The gradual but uneven recovery of the Los Angeles region’s economy will continue in 2003, with the strongest growth in the Inland Empire and the weakest in Los Angeles County, according to a regional outlook issued today by the USC Lusk Center’s Casden Real Estate Economics Forecastcolor>. Orange and Ventura counties should have moderate growth next year.
The regional outlook was presented at the Reality Check on Growth conference comprised of government, business and real estate leaders gathered today on the USC campus. The meeting was sponsored by the USC Lusk Center for Real Estate and the Los Angeles District Council of the Urban Land Institute.
“The other possible scenarios for the region’s economy are a boom or bust in 2003, but the most likely is a choppy recovery,” said Raphael Bostic, Ph.D., director of the Casden Forecast. While the region should continue to grow in 2003, its actual rate of growth will depend on the performance of the U.S. economy, he added.
“Recent employment and production statistics have not offered a clear picture of how the national economy is likely to perform in coming quarters,” Bostic noted. Political uncertainties such as a possible war with Iraq and the outcome of next month’s Congressional elections have further clouded the outlook.
“Most likely, next year will bring more of the same for the U.S. economy: sluggish, uneven growth,” Bostic said. “Even so, the region’s economy should continue to outperform the national economy.”
One concern is that the region’s recovery could be derailed by the rise in housing prices, currently at the levels of the housing boom of the early 1990s. That boom was followed by a 30% drop in prices.
But interest rates are at their lowest levels in decades: the rate on a 30-year, fixed-rate mortgage currently is about 6 percent vs. about 9 percent ten years ago and 16 percent – 20 percent twenty years ago. “From an affordability perspective, low interest rates have basically canceled out the rise in housing prices,” Bostic noted.