November 4, 2002 Vol. VII, No. 6

Professor Daniel Blake, director of CSUN's San Fernando Valley Economic Research Center.

Valley Has Job Growth, But Housing Market Remains Tight

College of Business and Economics' Center Assesses San Fernando Valley Economy in Annual Report

Private sector employment in the San Fernando Valley grew by nearly 2 percent last year, a significant improvement over the prior year, although housing remains tight and local unemployment claims have hit an eight-year high, according to a new report by researchers in Cal State Northridge's College of Business and Economics.

Valley private sector employment grew by 1.9 percent during 2001, compared to a 0.2 percent rate in 2000. The Valley's private sector added 12,764 jobs during 2001, growing from an average of 656,678 jobs in 2000 to 669,442 jobs last year. Valley private sector payroll grew by a fairly healthy 5.7 percent in 2001, compared to 4.7 percent in 2000.

Meanwhile, normal seasonal employment patterns are expected to help push unemployment claims lower in the months ahead, a trend that could be reinforced by a continuation of the Valley's recent job growth, said professor Daniel Blake, director of the college's San Fernando Valley Economic Research Center.

"The report highlights two of the main issues facing the Valley‹jobs and housing," Blake said. "The Valley's 2 percent overall job growth is particularly impressive when you consider that last year was a recession year, the events of September 11 happened, and the Valley's very important job generator‹the entertainment industry‹shed 8,800 jobs in the area."

More troubling, according to Blake, is the state of housing in the Valley. "The housing crunch is alive and well in the Valley," he said. "Growing housing demand has outstripped supply and resulted in rapidly rising prices and rents. Policies and actions that promote a responsive housing supply would stabilize prices and rents, and would help avoid a future housing bubble."

The center released its annual report on the state of the San Fernando Valley economy during the 14th annual Business Forecast Conference of the Valley Industry and Commerce Association (VICA), which was held Friday, November 1 at the Warner Center Marriott Hotel.

According to the report, the recession pushed unemployment claims to eight-year highs in the first two quarters of 2002, not only in the Valley, but also in Los Angeles County and the rest of California. However, Blake cautioned that the negative unemployment claims picture does not necessarily mean the Valley is still in the grip of a recession, since unemployment increases tend to lag behind other indicators of economic activity.

Among the other findings in the report:

Housing: The median price for resale homes in the Valley hit $320,000 in June, compared to a median price of $279,000 for Los Angeles County. The Valley's median home price‹the price at which half the homes sell for more and half sell for less‹has been climbing dramatically since early 1998.

Vacancies: The Valley's apartment vacancy rates, averaging 2.8 percent in the second quarter of 2002, continue to be substantially below normal levels despite the recession. Vacancy rates have declined dramatically in the past six years. The Valley's apartment vacancy rate has fallen faster and farther than the rate for the city of Los Angeles, which is nearly a percentage point higher.

Traffic: The 101 freeway at the 405 topped the charts as the busiest freeway segment in the Valley in terms of peak load at 22,100 vehicles per hour and annual daily traffic at 328,000 vehicles. Elsewhere, peak loads and average volumes increased mostly where they could, largely in the north and east Valley areas.

Entertainment: The Valley's entertainment industry employment decreased by 8.3 percent in 2001, but industry payroll rose by 2.9 percent. Valley entertainment jobs fell by 8,800 to just above 96,000. But at 14.4 percent of the Valley's total private sector employment, entertainment continued to be a major contributor to the area's economy.

--Carmen Ramos Chandler

@csun | November 4, 2002 issue
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