Economists forecast rough year for Bay Area in 2010

January 26, 2010 12:00:00 AM PST
Economists with the Association of Bay Area Governments are forecasting another rough year in 2010. They are predicting further anemic growth, further job losses and more foreclosures. If there is a silver lining, it's that maybe we have hit rock bottom and that there is nowhere to go but up.

"Today we are forecasting that we are going to continue to see some pretty bad news for the Bay Area economy," said economist Paul Fassinger.

ABAG believes that things are bad, but not as bad as they could be. They Bay Area has about 11 percent unemployment, the state's rate is 12.5 percent. Although last year ABAG predicted job growth would begin this year, now economists are pushing that prediction back a year.

"We don't think that we are going to see recovery for some period of time, in fact we will probably see a few more job losses in 2010 and only start to see some very small increase in employment out in 2011," said Fassinger.

That means a loss of as many as 20,000 jobs in 2010 and the addition of as many as 8,000 jobs in 2011.

The other big worry in this economic downturn is home prices. Analysts say that real estate prices in most regions have stabilized and across most types of homes.

"The main exception would be in some of the high end markets, but more and more it looks like month after month, there is evidence that prices have sort of bottomed out, at least for now," said Andrew LePage of DataQuick Information.

ABAG economists say federal stimulus is being used for long term projects in the Bay Area and a major impact has not been seen just yet.