A UCLA economist says California’s economic recovery is outpacing that of the rest of the country, so much that the high cost of housing — or lack thereof — and sheer number of jobs available are the main aspects that could hamper it.
But, according to that same economist, continued growth appears to be in the future for the state and for Santa Barbara County.
In a keynote address he called “The Economic Recovery Enters Middle Age,” Nickelsburg said the United States has more to look forward to since the recession recovery began in July 2009 — in spite of some naysayers out there.
“It’s not really over yet,” he said. “We have a long way to go. We’re stretching into this longest expansion, but the expansion has been uneven.”
California and other West Coast states have grown at a faster rate because of two variables: they are rich in technology and/or energy.
Inflation and high interest and rental rates have accompanied recovery, but so have increases in personal income and employment — growing in California by a whopping 3 percent, Nickelsburg said.
Even with baby boomers retiring, the working gap should be filled, he added, noting housing affordability as a possible foil.
Agents with Radius Commercial Real Estate & Investments shared a similar quandary for the tricounty area, particularly in southern Santa Barbara County.
Because inventory is lacking, the year saw fewer multifamily and commercial sales.
Rental rates were even more depressing, with the South Coast vacancy rate currently at 0.6 percent, according to Steve Golis, Radius principal and co-founder.
The average price for a one-bedroom apartment in Santa Barbara is $1,518 a month, up from just under $1,400 a year ago.
As for those looking to buy apartment complexes on the Central Coast, Golis said the market has just three available.
“It’s a great time to be an apartment owner,” he said. “I don’t know how (vacancy rates) will go lower, but they probably will.”
Office and industrial space for lease were also scarce, with an all-time low of 3.4 percent office vacancy in Santa Barbara and a 7.3 percent office vacancy in Goleta — the lowest since 2007, Radius principal Brad Frohling said.
Santa Barbara’s Funk Zone by the waterfront has no space available, but he said the under-construction La Entrada hotel and retail project on Lower State Street would bring 20,000 square feet of new retail space.
Unfortunately, it doesn’t look like the housing shortage will be solved that easily.
Nickelsburg didn’t foresee the price of renting or buying in desired areas of California declining.
“It’s not going to happen in general,” he said. “But, in spite of affordability, we will have migration.”