Rental market remains very tight, according to report by UCSB Economic Forecast ProjectBy Noozhawk, Tom Bolton
Santa Barbara County’s economy is doing fairly well in 2016. Employment is strong, the housing market has stabilized and wages are up.
That was the assessment offered Thursday during the annual Economic Summit presented by the UCSB Economic Forecast Project.
Several hundred people turned out at the Granada Theatre in downtown Santa Barbara for the morning-long program, which focused primarily on national and macro-economic trends.
Of note was an increase in overall employment in the county in 2015 of 5,558 jobs, a gain of 2.8 percent and the largest rise since 2012.
The county’s unemployment rate declined to 5.1 percent, and statistical forecasts suggest it will drop further — to 4.9 percent by the end of the year.
The city of Goleta had the county’s lowest unemployment rate at 2.9 percent, while Lompoc had the highest, at 6.6 percent.
Other unemployment rates included Buellton, 3.2 percent; Santa Barbara, 4.0 percent; Carpinteria, 4.4 percent; Guadalupe, 4.8 percent; Santa Maria, 6.1 percent; and Solvang, 6.2 percent.
On the real estate front, the median home price for the county increased 17.5 percent from the previous year, to $676,494.
That growth rate was considerably larger than for the state (5.7 percent).
As prices rose, affordability fell in the county.
Only 23 percent of Santa Barbara County residents were able to afford the median-priced house, compared with 30 percent of residents statewide, and 58 percent nationally.
The surge in the housing market has made an already-tight rental-housing market that much more difficult, what the report’s authors called “not for the faint of heart.”
A vacancy rate of less than 1 percent contributed to an 8.7-percent spike in rents in 2015.
The report’s authors gave this assessment:
“As the prospect of owning a home becomes a fantasy, many local residents will remain renters indefinitely…Additional demand for high-quality rental housing is being generated by empty-nest Baby Boomers seek to simplify their lives by trading in the family home for a luxury apartment in a fun urban setting.”
Peter Rupert, executive director of the Forecast Project, discussed the ramifications of what he called income “unequality,” as opposed to inequality.
The county’s per-capita income gained 1.3 percent to $45,795 in 2014, the latest year for which figures are available.
The gains, he pointed out, were experienced more strongly by higher earners than those at the lower end of the economic scale.
Perhaps not surprisingly, northern Santa Barbara County has more people in the lower-income brackets, while the South Coast has more in the upper brackets.
This is due, in part, to the fact that the North County has vastly more agricultural workers, while the South Coast leads in governmental, professional and business services employees.
Thursday’s keynote speaker was James Bullard, president of the Federal Reserve Bank of St. Louis, who discussed U.S. monetary policy.
“U.S. labor markets are at or possibly well beyond reasonable conceptions of full employment,” he said.
He also noted that interest rates have remained low for the last several years, and global concerns — including the strong U.S. dollar — seem to be waning.
Inflation rates have remained below the target set by the Fed, he said, adding that “a gradual pace of rate increases over the next several years” is likely.
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