ORANGE, Calif. — Orange County will recover economically by the end of next year or sooner, according to Chapman University's annual Economic Forecast released Thursday.
The news of vaccines for the coronavirus, effectiveness, and rollout has many economists bullish on the local economy.
"We think things will be back by next summer," Chapman President Emeritus and professor James Doti said. "Not fully back. Remember the forecast, it will be at the end of 2021. We see leisure and hospitality jobs... there's going to be a lot of recovery that we see happening next year."
Orange County was among the hardest hit when the pandemic began. A combination of lockdown orders, the lack of leisure and business travel into the region, the closure of Disneyland Resort, hotels, and other businesses throughout the county led to tens of thousands of layoffs.
"The COVID effect was greater negatively [in Orange County] than California because Orange County has an even greater proportion of leisure, hospitality, and tourism jobs," Doti said.
Payroll dropped 14.1% from the second quarter of 2019 to the second quarter of 2020. According to the forecast, year-over-year, total payroll employment fell 8.6% in 2020, compared to the state's 7.1%.
Though the coronavirus and its downturn have a lot to blame for the county's economy, Orange County's downfall has been building up pre-COVID-19, Doti said.
According to Doti, before the coronavirus, Orange County's job growth was zero, while the state was growing 1.2% or 1.3%.
Before the pandemic shutdown in February 2020, Orange County grew only half a percent more than other counties in Southern California.
But Orange County's economy didn't fully tank.
Housing performed very well throughout the year, fueling the county's economic recovery, Doti said.
Housing appreciation increased by nearly 8% year over year due to low mortgage rates and low supply, Doti said.
"[With] the drop in permit activity in the second quarter, the [housing] pipeline dried up. There's very little housing being built so the number of days to sell a home dropped," he said.
Next year, housing prices in the region are estimated to grow by 4.4%.
But beyond that, housing is expected to plateau due to affordability and the county's high housing prices.
With the vaccines' arrival, Doti said to expect a good 2021 for Orange County.
"2021 is going to be the turnaround year," he said. "COVID-19 is going to be a distant memory. The major reason for the optimism is the effectiveness of the vaccine."