Two well-known San Diego financial experts gave a sunny, upbeat economic prognosis for 2015 at a meeting of real estate professionals held Jan. 27 at the Bridges Club.
The U.S. economy is a “bright shining light” for the world, although other regions of the globe — such as Europe and Asia — are experiencing economic difficulties, said Lynn Reaser, chief economist of Point Loma Nazarene University’s Fermanian Economic & Business Institute.
“It looks like the U.S. is doing pretty well and we can withstand the sea of turbulence outside our shores,” said Reaser, who spoke before an audience of about 50 at the breakfast meeting.
The other speaker was George Chamberlin, the “Money Advisor” for NBC 7/39. Chamberlin is also the business editor for KOGO Radio and host of “Money in the Morning.”
Chamberlin said the stock market’s Dow Jones Average, which is one of the best indicators of economic health, has been up for six years in a row, one of the longest sustained increases in recent memory. Consumer confidence is also at its highest level in more than seven years, he said.
“They just feel really good about things,” he said.
Other good signs, said Reaser, are growth of the economy at near 3 percent, more job creation, low inflation and a lower unemployment rate, although she acknowledged that many people have stopped looking for work, and wages haven’t increased.
Closer to home, Reaser said California and San Diego in particular are doing well, and she noted that “the jobs are not all going to Texas.”
San Diego saw the creation of 44,000 new jobs last year, said Reaser: “Biotech is on fire.” Other sectors, such as tourism, the military, construction and health are also growing, she said.
“I think San Diego is on a good track,” Reaser said. “We’ll probably outperform the state and the nation again in 2015.”
One of the biggest economic developments in recent months, she said, was the drop in oil prices, which have led to gasoline prices in San Diego hovering at a little over $2 per gallon.
“The plunge in oil prices by more than 50 percent is just unprecedented,” she said, and has prompted a “huge shift of wealth” from oil-producing nations, such as Venezuela, Russia, Mexico, Canada and Saudi Arabia, to oil consumers, including the United States, India and China.
Reaser also focused on such topics as interest rates and the local housing market.
Economists expect the Federal Reserve to gradually begin raising interest rates this summer, and that mortgage rates may hit 4.5 percent by the end of the year, Reaser said.
She predicted increases in sales and inventory in 2015, as well as moderate increases in housing prices of 4 percent to 5 percent. “I think this will be a good year for real estate.”
Last year, the housing market settled down after a price spike in 2013. “Everyone took a breath and things got back to normal,” she said.
Today, she said, the housing market is fairly balanced, with no real advantage for sellers or buyers.
First-time home buyers will be coming back into the market, and more people may also decide to put their homes up for sale, as they try to move up into larger, more expensive properties, Reaser said.
One constraint on San Diego’s housing market, she said, is the regulations put in place by local governments. Such regulations can drag out the approval process for projects on available residential land, which is already scarce.
Reaser’s economic team at Point Loma Nazarene is working on a study of the impact of regulations on housing prices in San Diego County, and the report should be coming out in the next month or two, she said.
“It’s pretty scary,” she said.
Also at the Jan. 27 gathering, officials with the Bridges Club announced that the club would soon be transitioning to member ownership.
In a written statement issued Friday, club general manager Sean McCune said, “As of January 30, The Bridges became a true member-owned Club. Turnover was accomplished with all golf memberships sold and just a handful of national and junior memberships still available. Thanks to a lot of planning and hard work, HCC Investors, LLC and the Bridges Acquisition Committee achieved a seamless and successful transition to the membership.”