SANTA CRUZ -- The local economy, on a slow but steady recovery from the worst recession since the Great Depression, is one of the Sentinel's Newsmakers again this year.
The tourist industry experienced a satisfying rebound.
Hotels and motels, with 3,647 rooms countywide, saw 63 percent occupancy for the first 10 months, the highest since the economy crashed, according to Smith Travel Research. For this period in 2007, while the boom was on, it was 62 percent.
The average daily room rate in 2012 was $126, surpassing the 2008 peak of $123.
The housing market saw the beginnings of a comeback, but nothing like the return to pre-recession prices in Silicon Valley.
Compared to January 2005, the median price, or midpoint of what sold in October, is down 53 percent in Watsonville, 36 percent in Aptos, 32 percent in San Lorenzo Valley, 26 percent in Scotts Valley and 22 percent in Santa Cruz, according to MLSListings Inc.
The countywide median rose from the $400,000 level of 2011 to top $500,000, remaining in reach of first-time buyers though they are competing with investors. However, homeowners who bought at higher prices are stuck, owing more than what their home is worth and unlikely to be bailed out by rapid appreciation.
The number of mortgage-holders defaulting on payments, which topped 2,000 in 2009, has fallen to a little more than 1,000, according to the Santa Cruz Record. But this remains a significant drag on
HOUSING STILL RECOVERING
As for construction, the county reports the number of over-the-counter permits, granted for smaller jobs, have recovered to levels of five years ago, while building permits, reflecting larger projects, are half of what they were before the bust.
The Construction Industry Research Board reports 61 single-family home permits pulled in Santa Cruz County from January to August with a total value of $20 million. There were also 28 duplexes for $5.15 million, 103 multifamily units for $3.3 million and remodels stood at $19 million.
"Yes, it is not the recovery we were looking for," said Tony Falcone, the county's chief building official. "I am hopeful that once we work our way past the fiscal cliff and we are back into economic growth that we will see housing construction pick up, along with commercial growth."
Those in the industry are relieved to see improvement.
"Business is still far below my peak years of 1996-2006, but 2012 was better than any year since 2007, especially the second half," said Carey Casey of Casey Building Design, a member of the Santa Cruz Construction Guild. "I expect that trend to continue."
Mazzei Construction reported a steady year, with jobs lined up, no overlaps and no gaps.
"This to me is a good year," said Dean Mazzei. "It kept food on the table and the bills paid."
The November passage of Proposition 30 taxes for state government will avert a setback in Santa Cruz County next year, predicted Jeffrey Michael, an economist with the University of the Pacific who tracks the local economy for the Santa Cruz County Business Council.
Even though the government sector is smaller than it used to be, one out of five jobs in Santa Cruz County -- 21,400 out of 105,300 -- is a job with the government.
Proposition 30 will prevent some cuts to public schools, Cabrillo College and UC Santa Cruz, the largest employer in the county. That would have crimped consumer spending.
Michael noted the county population and public school enrollment declined during the recession but local public school enrollment is now rising. That could reflect population growth or parents pulling children out of private schools because they can't afford them.
JOBS picture MIXED
Another part of the local economy to keep an eye on, according to Michael, is what's happening in Silicon Valley. Of all the Santa Cruz County residents who have a job, 44 percent were working outside the county in 2010, up from 39 percent in 2006. The primary draw is over the hill, where jobs traditionally pay more and especially now with the rebound in tech, housing and construction.
From 2006 to 2010, the most recent census data, the number of county residents commuting to jobs outside the county rose from 37,600 to 45,700.
Those people are spending more time on the road and may be spending more money outside the county, creating a challenge for local retailers.
As of October, the number of jobs in the county had rebounded to 99 percent of the pre-recession number six years ago though there's no way to tell whether the jobs being counted are part-time or full-time. Government surveys do not distinguish between the two.
However, the mix of jobs has changed.
Farm jobs jumped 25 percent compared to 2006, followed by 24 percent in private education and health services, and 11 percent in leisure and hospitality.
Jobs in professional and business services are up 6 percent, but the trade and transportation and financial activities sectors have yet to fully recover. Manufacturing, information, and construction and mining jobs are down.
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Year 2006 2007 2008 2009 2010 2011 2012
Residents with jobs 138,900 137,200 137,300 131,900 134,900 140,000 144,400
SOURCE: California Employment Development Department
The number of people who live and work in Santa Cruz County has not changed much despite the recession and recovery. In four years, the number of county residents commuting outside the county to work grew from 39 percent to 44 percent while the number of out-of-county residents with jobs here grew from 29 percent to 35 percent.
Year 2006 2010
Live and work in county 58,293 58,551
Work in county 82,519 90,080
Work in county, live elsewhere 24,226 31,529
Live in county 95,861 104,282
Live in county, work elsewhere 37,558 45,731
SOURCE: US Census
New mix of jobs
Category Oct 2006 Oct 2012 Change
Farm 9,500 11,900 Up
Private education and health services 12,100 15,000 Up
Leisure/hospitality 11,000 12,200 Up
Professional and business services 10,100 10,700 Up
Other services 3,700 3,900 Up
Mining/construction 6,000 2,800 Down
Manufacturing 6,600 5,100 Down
Information 1,300 900 Down
Government 23,100 21,400 Down
Trade, transportation, utilities 18,900 18,000 Down
Financial activities 3,700 3,400 Down
Total 106,000 105,300 Down
Unemployment 4.1% 8.7%
SOURCE: California Employment Development Department