Q2 2012 Ventura County, California Commercial Real Estate Economy

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Q2 2012 Ventura County, California Commercial Real Estate Economy

As in Southern California generally, persuasive economic recovery has been slow to materialize in affluent, largely-suburban Ventura County (located directly north of Los Angeles County). While it covers a large geographic area and hosts a number of cities including Thousand Oaks, Simi Valley, Ventura, and Oxnard (for which the local Metropolitan Statistical Area (MSA) is named), its population base, relative to other L.A. Basin metro areas, is small at about 850,000. In addition, it lacks the diverse economic base that might help speed its way toward decisive economic growth. Ventura County’s single largest employer, as described by NAI Capital Reporter, “is Naval Base Ventura County and Point Mugu Naval Air Station.” Bioscience firm Amgen, the county’s largest private employer, “has been expanding operations outside of Ventura County for several years,” this source reports. Trade flows through Port Hueneme also play a significant role in the local economy.

“Ventura County’s recovery has been especially slow,” notes NAI. Indeed, with gains in employment some industry sectors neutralized by losses in others, the county economy as a whole shows little forward motion. According to preliminary data provided by the U.S. Bureau of Labor Statistics (BLS), total non-farm employment as of August was down 700 jobs (0.3%) from 12 months prior—this at a time in which positive growth, if at varying rates, has been a common trend nationwide. As reported by the BLS, the strongest performance for the period belonged to the local Professional and Business Services sector—a 9.8% increase over 12 months representing the net addition of 3,100 jobs. This gain, however, was whittled away by losses in other major sectors including Construction, Manufacturing, Education and Health Services, and Trade, Transportation and The Government sector (federal, state and local combined), an albatross around the neck of most California metro areas as a result of the state’s perpetual budget crisis, added to the loss column with a year-over-year decline on the order of 1,400 jobs (3.2%). Along these lines, NAI reports total employment “associated with” the naval facilities at somewhere between 15,000 and 20,000 jobs. “However, given downward pressure on defense spending, [the base] is unlikely to contribute significant job growth in the near term. In the longer run, the existence of the base is threatened by continuing efforts to reduce and consolidate military bases. The closure of the base would devastate Ventura County’s economy.”

Speaking of devastation, the local and regional housing markets show signs of climbing out of the deep hole into which they fell as a result of the national recession and related housing market catastrophe. According to DataQuick as reported by the Ventura County Star in September, home prices and sales volumes in Southern California as a whole, in August, were up 14.2% and 11.0%, respectively, year-over-year. In Ventura County, sales over the period increased fully 27.8% (978 closed sales). At $365,000, the median selling price for the month was up 2.8%. “From an economic perspective, the increases in home sales and prices are good signs for Ventura County because they are not occurring evenly throughout California,” a local economist informed the source. Adds the Star, “real estate agents say cash buyers are driving home sales in Ventura County.” In a separate September report the Star, citing data provided by RealtyTrac, reports “a dramatic plunge” in foreclosure filings in the county in August. There may be less good news here than meets the eye, however. “With rising prices, the potential home sellers, including banks, are reluctant to put the properties on the market because they can get higher prices by waiting,” another economist informed the source. Still, the market profile appears to show improvement overall.