Economic forecast appears optimistic in Folsom, El Dorado Hills regionBy: Art Garcia, Telegraph Correspondent
The team of financial analysts and researchers who were bullish a year ago about the outlook for the Sacramento region’s 2012 economy were right and for 2013 it’s “much more optimistic” about what’s ahead.
El Dorado Hills, El Dorado County and Folsom share in those positive projections by the team, headed by Sanjay Varshney, dean of the College of Business Administration at California State University, Sacramento, and a resident of El Dorado Hills.
“For 2013, we are much more optimistic that real estate markets will see recovery, unemployment will decrease to a high single digit, local banks will continue to improve their financial health, the local government will stabilize and equities will remain the favored asset class, with lower systematic risk,” Varshney wrote in the economic report published in the university’s Sacramento Business Review.
But, the report notes, the region “still faces headwinds with unemployment higher than the national average, banks struggling with loan demand to increase their top-line revenue and small businesses facing tough choices in the face of the fiscal cliff and Affordable Care Act implications.”
Overall, though, this year “promises to bring better news and a stronger economy and both consumers and businesses share this optimism,” Varshney pointed out.
The view from El Dorado County offices in Placerville is more modest but also bright. “There’s definitely promise” for 2013, said Kim Kerr, county assistant chief administrative officer, who oversees the Economic Development Division.
“We are seeing an increase in building permits and in the transient occupancy tax (hotel bed tax),” she said. “Things seem to be improving.
“There’s uncertainty because of what’s happening at the state and federal levels, but we’re definitely seeing a turn for the better,” she said. “We’re definitely seeing it in housing starts, especially in El Dorado Hills.”
In Folsom, Joe Gagliardi, president and chief executive of the chamber of commerce and the Folsom Economic Development Corp., is “cautiously optimistic” about that city’s economy this year.
There’s increasing activity in building permits and people appear to be “positive and optimistic” about retail activity, he said.
Besides the housing market, there are more inquiries regarding commercial development, Gagliardi said. The Palladio open-air mall anticipates being about 80 percent fully leased by the end of this year, he said.
Greg Paquin, president of The Gregory Group in Folsom, a new-housing consultancy, is “very bullish” on this year for the local area.
He believes the housing recovery is real and sustainable, pushed by current low interest rates and limited supply, especially in El Dorado Hills, but also Folsom.
Job growth, nationally as well as locally, is picking up and should continue over the long term, Paquin said.
Local home values have returned to around the 2002-03 level, with about a 12 percent price increase last year. “We’re projecting, based on supply, probably another 10-12 percent increase this year but beginning to slow in 2014-15 as more product comes on the market,” he said.
“In general, the consumer and the industry both are feeling rather optimistic,” said Paquin. “There’s a sense there’s positive news to continue and people are feeling more whole, more like we’re getting back to a normal environment. That’s all good news.”