SLOWER GROWTH, BUT NO RECESSION
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Happy Holidays from the Horton Team!
As we all wind down from a busy 2019, the Horton Team has been looking ahead and preparing for the year ahead. As part of this preparation, we attended yet another one of the most highly regarded economic forecasts in the country, the Chapman 2019 Economic Forecast, to see what Orange County's best and brightest have to say about where they think Orange County, California, the US, and the global economy is headed in 2020.
The headline for this forecast confidently suggests that 2020 will be another good year, both in housing and for the economy as a whole, but the growth and recovery we've been experiencing since the years following the great recession is beginning to show signs of slowing. Job growth statistics are typically one of the biggest indicators of economic health and future business activity, and while growth is still positive, it has been beginning to decline year over year. Generally a good recession indicator is job growth of 1% or less, indicating a recession may be on the horizon. In October, job growth came in at 1.4%, down from 1.9% early in the year. (For reference, excellent job growth rates of the "dot com" boom and before the great recession averaged a little over 2%, and were as high as 2.6%.)
The current "stalling" of economic growth is not severe enough to provide a clear recessionary signal. Although job growth has declined, its still strong enough to help keep consumer spending on a positive path; consumer debt levels are still fairly low as well.
The most important trend pointing towards a positive 2020 is a strong construction sector, a metric that shows how historically low mortgage rates have brought about a surge in demand for housing inventory. Greater builder confidence, combined with a tight supply of existing homes for sale are predicted to propel total housing starts as much as 6.2% across the country, with the housing sector alone expected to account for 1% of real GDP growth in 2020.
Moving our focus to the local economy, that of California and specifically Orange County: We are seeing job growth continue to slide, slightly further than the U.S. and even California, closing in on 1.3%, a far cry from the excellent 2.1% growth OC saw in 2018. This is a result of a drop in construction jobs from earlier in the year when rates were closer to 5%, as well as a decline in the transportation and warehousing sectors as a result of the trade war.
This slide in job growth is compounded by recent population growth decline and out-of-state migration over the past few years, may end up constraining long-term future home building in the county. However, in the short run, higher housing affordability due to low rates and a tight supply of housing will lead to strong market conditions in 2020. Inventory numbers are quite low right now, and with rates as low as they are, there are buyers out there. Given these conditions however, those buyers just won't have as much freedom of choice like they did in the beginning of this year.
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ALL SALES BY THE HORTON TEAM IN 2019
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397 Weymouth, Laguna Beach
Represented Seller
Sale Price: $7,370,000
5bd, 6.5ba, 4,949 sqft
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10 Bay Drive, Laguna Beach
Represented Buyer
Sale Price: $5,340,000
4bd, 5.5ba, 3,418 sqft
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12 N Portola, Laguna Beach
Represented Seller
Sale Price: $3,300,000
3bd, 3ba, 2,441 sqft
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674 Seaview St, Laguna Beach
Represented Buyer
Sale Price: $3,000,000
5bd, 4ba, 2,500 sqft
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1189 Catalina St, Laguna Beach
Represented Buyer
Sale Price: $2,100,000
3bd, 2.5ba, 2,000 sqft
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3143 Bonn Dr, Laguna Beach
Represented Seller
Sale Price: $1,750,000
4bd, 3ba, 2,057 sqft
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480 Thalia, Laguna Beach
Represented Seller
Sale Price: $1,700,000
2bd, 2ba, 1,207 sqft
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934 La Mirada, Laguna Beach
Represented Seller
Sale Price: $1,564,000
3bd, 2ba, 1,734 sqft
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785 Bluebird Canyon, Laguna Beach
Represented Seller
Sale Price: $1,500,000
3bd, 2.5ba, 2,585 sqft
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1098 Wykoff, Laguna Beach
Represented Seller
Sale Price: $1,450,000
3bd, 3ba, 1,642 sqft
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1489 Regatta Road, Laguna Beach
Represented Seller
Sale Price: $1,430,000
4bd, 2ba, 1,831 sqft
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1490 Del Mar Ave, Laguna Beach
Represented Buyer and Seller
Sale Price: $1,420,000
3bd, 3ba, 1350 sqft
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454 Broadway , Laguna Beach
Represented Seller
Sale Price: $1,400,000
3bd, 3ba, 2,174 sqft
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895 La Mirada, Laguna Beach
Represented Buyer
Sale Price: $1,250,000
2bd, 1ba, 1,188 sqft
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31984 Coast Highway, Laguna Beach
Represented Buyer
Sale Price: $1,190,000
2bd, 2ba, 980 sqft
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605 Glomstad, Laguna Beach
Represented Seller
Sale Price: $1,173,200
2bd, 1ba, 798 sqft
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3 Seabridge, Laguna Niguel
Represented Buyer
Sale Price: $1,045,000
4bd, 3ba, 2,552 sqft
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336 Canyon Acres, Laguna Beach
Represented Buyer
Sale Price: $765,000
2bd, 1ba, 725 sqft
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21711 Wesley Dr #B, Laguna Beach
Represented Buyer and Seller
Sale Price: $655,000
2bd, 1ba, 900 sqft
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CURRENT LISTINGS
Laguna Beach
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2841 Ridge Dr - For Rent
4 bd, 4.5 ba, 4,400 sqft
$8,900 / mo |
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1576 Del Mar Ave - For Rent
3 bd, 2 ba, 1,476 sqft
$4,200 / mo |
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MARKET STATISTICS
Laguna Beach
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Active - 207 (Down 17% vs. Nov.)
Pending - 37 (Down 5% vs. Nov.)
Sold in November - 22 (Down 48% vs Oct.)
Under $1,000,000 - 0
$1,000,000 - $2,000,000 - 14
$2,000,000 - $3,000,000 - 5
$3,000,000 - $5,000,000 - 3
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