Ventura County:

Long COVID Recovery Inflaming Already-Weakened Economy

Ventura County’s economy is in for a long slog as it trails behind the recoveries of both California and the United States in 2021. The COVID-19 pandemic has only exacerbated the county’s evolving problems over the past decade, including diminished housing affordability, low-paying jobs, and residential outmigration of younger workers.

That’s according to the most recent forecast and trends presented by experts from California Lutheran University. These experts’ opinions spotlight intriguing viewpoints, trends and projections so your credit union can plan appropriately.

California Lutheran University
Presented on Nov. 5 by the Center for Economic Research and Forecasting (“Charting a Road to Recovery: Covid-19 Impacts on Ventura County"):

Ventura County's economy faces a prolonged recovery since the region already faced weakened circumstances before it headed into the recession caused by the COVID-19 pandemic earlier this year. Thus, the onset of the pandemic is an important, if ominous, mile-marker in the county's history. The pandemic and resulting policy responses were an unprecedented shock to an economy already chronically weak.

By late 2022, Ventura County's labor market will still be more than 9,000 jobs below its pre-pandemic level. Non-farm payroll jobs hit the 314,000 mark in January 2020 before dropping to 271,000 by May (a 14 percent decline). This figure has since recovered to 290,000, but it is forecasted not to reach 305,000 until November of 2022 (or reach the original 314,000 level until early 2023). That means the county’s job growth over the next few years will lag California's (and in turn, California will lag behind the United States).

Besides job growth, Ventura County's local domestic product (or local GDP — Growth Domestic Product) will also lag behind the entire state's GDP. Ventura County’s GDP, after plunging -3.9 percent in 2020, is expected to rise 1.7 percent in 2021 and 1 percent in 2022, which is hardly enough to substantially recover from the COVID-19 pandemic, let alone an already-weakened local economy. This is a continuation of a well-established, longer-term pattern across the county where job growth exceeds GDP growth (which points to the county’s largely low-skill job growth over the past decade). This pattern has been one of the causes of the county's declining economic strength over many years, one that will not end even when the COVID-19 crisis eventually fades.

The post-COVID crisis recovery is likely to accelerate the exodus of residents leaving Ventura County who need a cheaper area to live, as well as the contraction of the local labor force and decline in population. This unfortunate trend was already underway for many years, and it will also likely affect the compositional transformation of the county. Jobs in high paying sectors will continue to decline, likely at a higher rate than before the pandemic. Jobs that can be conducted somewhere else at a lower cost will most likely leave the county. However, jobs in non-tradable services (those completed in proximity to the individuals paying for those services) will remain in the county and continue to grow in number.

However, putting population decline and outmigration aside, early evidence from the real estate sector in Ventura County indicates that “urban flight” into the county from the nearby Los Angeles Region is real — at least for the time being. The only question is how long this pressure from more-urban neighbors will last as they pour into the county (those who can afford it). Locals can expect to see evidence regarding this phenomenon’s duration as more data arrives with home prices and listing times going forward. Home value appreciation from July to October across the county has already pushed 2020 year-to-date price growth to 4.4 percent, considerably stronger than 2019. Relatively speaking, Ventura County’s open space and considerable environmental amenities compared to Los Angeles County surely look even more attractive during the pandemic, at least to those who can pay the price of entry. This is the county’s only possible “upside” (positive) risk right now going into 2021.

The primary downside risk for Ventura County is a potential (and second) full-scale, government-mandated shutdown of businesses and social interaction due to the continued COVID-19 pandemic. “Given how much more is known about the novel coronavirus, as well as how courageously county officials have moved to re-open the economy thus far, hopefully this downside risk is low in probability,” the forecast report states. However, even without a COVID-19 vaccine, research by the Becker Friedman Institute at the University of Chicago indicates that “targeted closures can achieve the same (health) policy goals at substantially lower economic losses.” The forecast also notes the Great Barrington Declaration and its support by thousands of epidemiologists and other public health scientists who advocate for a policy of “focused protection” rather than a complete lockdown. “These and related research point a way forward on Ventura County’s road to recovery,” the forecast states. “Given the quality of leadership at all levels of the county thus far during the crisis, we believe the downside risk is avoidable.”

Ventura County’s economy has been stuck in stagnation for many years. After averaging zero economic growth from 2014 – 2018, the local economy finally experienced a very meager expansion in 2019, supported by weak employment and even weaker population growth. The county’s projected “negative net domestic migration” is important to its future. The county has been missing out on the high economic productivity of individuals undergoing household formation and career development. With a weak economy for years on end, and growth inhibiting economic development policies, Ventura County job growth has been slow for quite some time. Without substantial improvements in housing affordability and housing construction (increasing supply), the county’s future is increasingly one that spotlights the “haves and have nots” (wealthy residents versus the largely commuter, low-wage worker population that enters the county each day to work).

Ventura County housing market sales in September jumped more than 32 percent, reaching a volume the county has not seen since June of 2017. However, given seasonality data, only past September performances should be compared, which means September 2020 home sales are the highest they have been since 2006. This comes after Ventura County housing market indicators followed a pattern somewhat like other economic indicators — they moved down suddenly and sharply in April and May (-28 percent and -49 percent), both compared with the same month in 2019. June, July, and August saw relatively modest sales improvements before rebounding in September.

Ventura County’s median home price rose in March and April, declined in May, and then rose every month from June to September. The latest median home price value of $664,000 is an all-time high (combined median for condos/townhomes and single-family detached homes). However, for single-family detached homes only, the median price in April dropped to a trough of $675,000 before rebounding sharply to $787,000 in September. The market for Ventura County homes has become very tight in just a few months’ time as the median time on the market has dropped four months in a row and reached a recent low of 30 days. The local unsold inventory index, after spiking in May, has dropped to a low of two months-worth of housing stock.

While it’s beneficial for Ventura County’s housing market to rebound to levels not seen in 14 years, these local economic benefits would be dwarfed by the benefits of significant new housing production — which the county has lacked for several years. New homes have a huge multiplier effect on the economy, accelerating activity in many other industries, including construction, materials, home furnishings, and many more benefits. New home-builds also release existing homes to the market, and those vacancies provide a ladder for lower or middle-income households to find a home that matches their needs and budgets. Home building activity fell to very low levels in April and May, then recovered a bit in June through September to levels just above those months in 2019. However, these home-building rates are paltry given the region’s historical context. With 10 months of building activity on the books for 2020, local residential construction rates since 2018 have been very low (and the trend appears to be downward going forward). Also, despite the historically low non-residential permit rate in 2020 (commercial construction of office, industrial, and retail space), this is likely to be even slower in 2021.

You can view more Ventura County housing trends. Just click here to view local existing sales, existing median prices, new home prices, and other figures for the entire county and the communities of Camarillo, Oxnard, San Buenaventura, Moorpark, Simi Valley, and Thousand Oaks.

Ventura County: Demographics, Labor, Education & Economic Resources

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