Sluggish recovery for L.A. region
October 11, 2002
Lusk Center economic forecast predicts 'choppy' upturn, reliant on U.S. performance
Inman News Features
The Los Angeles region's economy will continue its gradual but uneven recovery in 2003, according to a regional outlook issued today by the University of Southern California Lusk Center.
The Casden Real Estate Economics Forecast predicts the strongest growth in the Inland Empire and the weakest in Los Angeles County, with moderate gains in Orange and Ventura counties.
While the region is expected to grow, its actual growth will depend on the U.S. economy's performance, said Raphael Bostic, Ph.D., director of the Casden Forecast. Bostic acknowledged boom or bust scenarios for the Los Angeles economy, but said the most likely scenario is a "choppy" recovery.
"Recent employment and production statistics have not offered a clear picture of how the national economy is likely to perform in coming quarters," said Bostic.
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," said Bostic. "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. A bust of a 30 percent drop in prices followed that boom.
In response to the possible loom of bust in the housing market, Bostic stands behind what a lot of experts are pointing to these days: the lowest levels of interest rates in decades. "From an affordability perspective, low interest rates have basically canceled out the rise in housing prices," he said.
Copyright: Inman News Service