Orange County job growth is expected to slow to its lowest level in five years, with housing prices here seeing their first dip in years, according to Chapman University’s 2007 forecast released Thursday.
Chapman economists project the county will create 15,000 jobs in 2007 for a 1% gain.
Job growth is expected to be 1.4%, or 21,000 new workers, this year. Job growth was 2.3% in 2005.
OC job growth peaked at 6% in the first quarter of 1998. Since then, only the manufacturing sector has declined in jobs, falling an average of 2.1% per year.
The weak homebuilding sector is the main reason behind the forecasted growth slowdown.
Construction and the related financial activities sector could lose 2,000 workers next year, an 0.8% decline, said Esmael Adibi, director of the A. Gary Anderson Center for Economic Research at Chapman University in Orange.
The construction sector gained about 4,000 workers this year, in large part due to office and other commercial construction around the county. Since 1998, the construction industry has seen an average of 5.6% annual growth.
If construction besides homebuilding remains strong, it could keep the sector from pushing the country into recession, said James Doti, Chapman president.
For the second straight year, Chapman is predicting a drop in local housing prices.
The median price of homes sold in OC is expected to fall 6.4% next year, according to the forecast.
Housing prices showed a 2.6% increase this year, while Chapman predicted a 4.2% drop.
Prices have begun dropping as predicted in the past few months, Adibi noted.
“The housing market is dragging down job growth,” Adibi said.
The median price for a detached home sold in Orange County in October was $681,340, down 3.6% from September, according to the California Association of Realtors. The October price is off 7% from the record highs of six months ago.
On a national level, Chapman expects the Federal Reserve Board to leave the benchmark Federal Funds rate at 5.25% in 2007. It also expects real gross domestic product to grow 2.1% next year, compared to the 3.3% growth seen this year.
