STANISLAUS COUNTY -- Jobs are expanding in Stanislaus County and income is edging up as the region finally begins pulling its way out of recession, according to University of the Pacific Business Forecasting Center predictions released Tuesday.
"We expect a much higher level of employment in 2013," said Jeffrey Michael, director of the Stockton center. "We're finally into recovery and things are improving, but we have a long way to go."
Stanislaus lost 16,100 jobs about 10 percent of its total nonfarm employment from 2007 through 2011, but Michael said the tide began turning last year.
By the end of 2013, Michael predicts that the county's employers will have added 6,000 jobs providing an average employment increase of 2 percent per year.
Michael expects Stanislaus to steadily add jobs the next four years, especially in construction trades, professional and business services, and the leisure and hospitality sectors.
"By 2017, if you count up all the jobs, you'll see (Stanislaus) is pretty much back to where it was in 2005," he said.
So while Stanislaus' population is projected to increase by 52,600, Michael doesn't expect its employment base will end up having grown at all during those 12 years.
Those extra people, however, will need somewhere to live, and that's partly why construction jobs are increasing.
"The near-zero levels of home construction we've seen in recent years were unsustainably low," Michael explained. He expects Stanislaus will need to build about 3,000 homes per year from 2015 to 2020 to keep up with demand.
Much of that demand may come from Bay Area commuters seeking lower-cost housing.
"The price difference between a house in Modesto and a house in the Bay Area is greater now than it was during the dot-com days," said Michael, referring to the late 1990s when the emerging high-tech industry set the economy on fire.
The forecast center's report calculates that a single three-bedroom house in San Jose costs about the same as 4½ houses of similar size in Stanislaus.
That home price ratio is even more out of whack in Merced County, where nearly six homes can be purchased for the price of one San Jose house.
"We have no doubt that the lack of building, population growth and slow household formation are on pace to create a very tight housing supply
in the next two to four years," the report says about the Northern San Joaquin Valley.
The forecast predicts that there will be "rapid price appreciation of up to 30 percent" for homes throughout the region during the next two years.
"While that sounds impressive, that would only bring nominal home prices up to roughly 2003 levels by 2014," the report notes.
Rising personal income levels should help home buyers afford those increasing home prices.
"Real personal income is expected to increase at a healthy rate of 3 percent in 2013" in Stanislaus, 2.8 percent in Merced and 1.7 percent in San Joaquin County, according to the report.
Founded in 2004, the Business Forecasting Center produces quarterly economic forecasts for California and 10 of its metropolitan areas.
On the Net: http://forecast.pacific.edu.
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or (209) 578-2196.