2010-11-12 / Front Page
Camarillo set to prosper in economic recovery, expert says
Battered by recession, city is weathering it better than most
The past three years have marked the worst economic downturn for Camarillo since it became a city in 1964, said economist Bill Watkins at the 10th annual Camarillo Economic Outlook Luncheon on Nov. 4.
But Camarillo will likely fare better over the next 18 months than most California cities, according to Watkins, director of the Center for Economic Research and Forecasting at California Lutheran University in Thousand Oaks.
The report was presented to city, county and business leaders gathered at Camarillo’s Spanish Hills Country Club.
Watkins said he expects a long and weak recovery for the nation and an even slower recovery for California. Few, if any, California cities will see growth in the coming months.
But “Camarillo will stand out,” he said, because of its wealthy residents, strong retail sales, relatively low unemployment and flat home prices.
Watkins said he expects economic activity in Camarillo to climb by 4 percent—the strongest growth forecast anywhere—by the second quarter of 2012.
The good news is that some of the growth will come in the form of salary increases. The bad news: Watkins expects only 300 new jobs to open up in Camarillo in the next 18 months.
Employment Camarillo’s unemployment rate is an “enviable” 8 percent, Watkins said, well below the state’s 12.4 percent average and the state’s 12.4 percent average and the nation’s 9.6 percent.
Part of the reason is that Camarillo has a large population of well-educated, higher-wage earners who are typically least affected by the recession, he said.
Even so, Camarillo employers in all but three industries have shed jobs since the recession began three years ago. Construction was hit the hardest, losing 60 percent of its work force, or 1,500 jobs; durable manufacturing 28 percent of its employees, or 2,000 jobs; and the professional and business sector 24 percent, or 1,800 jobs.
The three exceptions: Jobs in healthcare and education grew to 3,200 during the recession, while the number of agriculture jobs— about 4,500—has remained steady.
Watkins predicted little job growth for Ventura County over the next 18 months. For the first time in at least two years, he projected no national job losses.
California has suffered a slump in retail sales for the past few years. In Ventura County, retail sales dropped more than expected— about $2,000 per resident—since the recession hit in 2008.
Camarillo also suffered a drop in retail sales, but Watkins said the decline is over.
The Promenade, a 40-store expansion of the Camarillo Premium Outlets that opened in April 2009, probably mitigated what could have been an even larger decline in retail sales, he said. Also, the new stores put Camarillo in a good position to benefit even more when the economy recovers.
Overall, taxable sales are expected to climb in Camarillo, starting in January and continuing through the summer of 2012, Watkins said.
Since 2008, sales and prices of homes in Camarillo have dropped significantly. Camarillo property values have plummeted at least 30 percent, although the decline hasn’t been as deep as elsewhere in the county, Watkins said.
The median price for a singlefamily home in Camarillo has dipped below $500,000, but prices aren’t likely to slump much more, Watkins said.
Foreclosures in Camarillo are likely to stay high over the next 18 months. Watkins forecasts 60 foreclosures this year, with a dip by the second quarter of 2012. Home foreclosures peaked at 104 in 2008.
Slow job growth and the state’s bleak economic outlook will continue to impact Camarillo home prices and sales for the next two years or more, Watkins said.
Camarillo’s commercial real estate market will remain weak, Watkins said, as will the forecast for the rest of the state. Office vacancies in Camarillo soared more than 20 percent during the recession, but signs indicate the rate won’t climb further. Industrial vacancy rates have improved over the last year.
Camarillo’s retail vacancy rate is a “bright spot” in commercial real estate, Watkins said. Though vacancy rates had doubled to about 5 percent due to the recession, they’ve dropped to about 3 percent in recent months.
“Cities across California would kill for numbers like these—these are fantastic,” Watkins told the audience.
New home construction in Camarillo has ground to a halt. This year, the city issued one construction permit and none in the last half of 2009. Camarillo hasn’t issued any multifamily housing permits since January 2008.
Watkins said his economic forecasts assume there will be no tax increase this year. If the government raises taxes, however, it could have a negative impact on the economy, with much of it felt later and growing over time.
Though Camarillo’s economy has been battered by the recession, it hasn’t been as badly damaged as other cities in California and is situated to prosper in an eventual recovery, Watkins said.
“This is the best forecast in a couple of years I’ve given, and I hope the years ahead are even better,” Watkins said in conclusion.
Nan Drake of E.J. Harrison and Sons, a recycler and trash hauler that’s operated in Ventura County for 78 years, said Watkins’ report was encouraging.
“It’s good news for Camarillo— obviously that was the big message,” Drake said. “It’s good news for us because we do business with Camarillo” and most of Ventura County.