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By ROBERT DIGITALE
THE PRESS DEMOCRAT
Real estate sputtered and the wine crop disappointed, but the tech sector rallied and tourism bounced back in Sonoma County in 2011.
A worker installs siding on a home under construction in the Lennar development at Linwood Villas in Santa Rosa. (John Burgess / PD)
Many families and businesses continued to struggle last year, but economists and business leaders suggest the worst may be over for the county’s economy.
“We’re beginning to see the tide change,” said Ben Stone, executive director of the county’s Economic Development Board.
Still hovering in the shadow of the recession, 2012 is expected to produce business growth, but at a rate that in earlier recoveries would have been considered sluggish.
“Right now the pace of economic growth is still painfully slow,” said Eduardo Martinez, a senior economist who studies the county for Moody’s Analytics in West Chester, Pa.
The county’s unemployment rate, a key measure of economic health, averaged about 9.9 percent for 2011, down from 10.5 percent in 2010.
This year the unemployment rate is expected to fall to 8.9 percent, but it won’t average 7 percent until 2014, Martinez said.
A key reason unemployment remains so high is due to the collapse of the real estate and construction sectors.
While 2011 was expected to be the worst year in a half century for single-family home construction nationally, Sonoma County saw slight improvement.
As of November, builders had received 532 permits for new single- and multifamily homes, compared to 429 for the same period in 2010. Still, the numbers amount to a fraction of the 2,000 homes built annually in the decade before the housing downturn.
In recent months, builders have expressed more optimism for both residential and commercial projects than in the past few years, said Keith Woods, chief executive officer at North Coast Builders Exchange, a Santa Rosa trade group.
“I think there’s a chance 2012 begins the rebound,” he said.
For existing homes, the median single-family home price was $325,000 for the first 11 months of the year, down 3 percent from the same period in 2009 — previously the worst year since prices plunged. The annual median price is now the lowest in more than a decade. It peaked in 2005 at $595,000.
Foreclosure sales are likely to increase in the coming months, with prices bottoming this year, Martinez said. He doesn’t expect measurable increases in home prices until 2013 or 2014.
It wasn’t just a bad year for housing. The county’s grape growers suffered through bad weather and reduced yields.
The crop was down 20 percent or more from its five-year average and likely was the smallest since 2003, said Nick Frey, president of the Sonoma County Wine Grape Commission. The value could end up around $435 million, nearly 30 percent below 2009.
Growers feel more optimistic for this year, Frey said, but remain cautious “because we don’t know which way the economy’s going to go.”
In contrast, some tech companies showed healthy gains.
Agilent Technologies, the largest tech employer in Sonoma County, announced in the spring that its 8,000 employees worldwide, including 1,100 in Santa Rosa, would get a 14 percent bonus in June. In November, the company’s Santa Rosa-based measurement group posted its most profitable quarter in history, powered by demand for ever-more sophisticated smartphones.
And Medtronic’s Santa Rosa-based vascular division in November posted $564 million in quarterly revenue, up almost 13 percent from the same period a year ago. Medtronic, the world’s largest medical device maker, has about 840 employees in Santa Rosa.
Tourism was another bright spot. Hotel occupancy through November was up 8 percent from the previous year, according to the county Tourism Bureau. And as of September, ridership on Alaska Airlines flights to and from Santa Rosa was up 13 percent over the same period in 2010.
“In 2011, we saw some really great turnaround,” said Tourism Bureau spokesman Tim Zahner.
Jonathan Coe, president/CEO of the Santa Rosa Chamber of Commerce, said many companies are holding their own because they already have made painful cuts to staff and expenses.
“I think most businesses have adjusted to this difficult new normal,” Coe said.
Carolyn Stark, the group’s new executive director, said it has launched a business promotion effort similar to one developed in Austin, Texas, which the Milken Institute last year ranked as the fourth-best metropolitan area in the U.S. in terms of creating and sustaining jobs and economic growth.
Sonoma County was ranked 167 in the same survey.
Stark said of Austin, “In 2003 and 2004 they built the plan, and now it’s paying off for them.”
For the coming year, economic threats remain, especially due to potential debt crises in Europe and elsewhere around the globe. But even if the threats disappear, county residents likely will see relatively high unemployment and rather tepid economic activity.
“We have just have to get used to the idea that the next few years are going to be stable,” said Sonoma State University economist Robert Eyler, “but it’s just going to be at a lower growth rate.”
You can reach Staff Writer Robert Digitale at 521-5285 or robert.digitale@pressdemocrat.com.
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@Money – having Kmart leave Santa Rosa could actually boost our economy – COSTCO has long wanted a new location in the North side of town, and this site would fit the bill nicely.
MockingBird:
You may dislike my filling in the gaps of the article, but thats too bad.
The article author, ROBERT DIGITALE, routinely attempts to put a positive spin on his work.
Remember what Vice President Biden stated in public two years ago ? He acknowledged that America has “lost 6 million jobs and they are NOT coming back.”
Well, Mr. Biden was partly wrong. We are gaining minimum wage jobs right here in Sonoma County.
Money Grubber-public employees didn’t put Kodak into bankruptcy or close those Sears stores. PUBLIC EMPLOYEE PAYCHECKS supported these businesses. We shopped at Sears and bought Kodak products. The more public employees laid off or incomes cut the less we can buy to support the economy. It’s because people don’t have the resources they once did that businesses are suffering. It’s because the supper rich are hoarding money and not creating jobs that will bite business in the behind in the end.
This war on public employees is a war against working people. It is just plain wrong.
You already heard that 3 Sears stores are being closed down in San Diego County and that others are on the unpublished list to be shut down soon within California.
Did you know that, as of two days ago, KODAK has begun to file bankruptcy.
Yep.
Things are looking up, are they not ?
Well, they are if you have a public pension and you qualify to use it because you are 50 years old.
@John Bly
I agree with your post in terms of economics, and it’s good to see optimism.
But the political problems will remain. With so many mindless left-wing entities in Sonoma County, Dante’s warning in his Inferno of “Abandon all hope ye who enter here” sums up the political landscape.
People who correctly believe that “We need more businesses to tax rather than more tax on businesses” are always outvoted by the big government types who have no clue on what makes an economy prosper, but sure know how to “get theirs” from the taxpayers.
Marx is Right, Graeme, Missy:
There is no liberal press, only corporate overlord press.
The leftist press now wants you to believe we are on the road to recovery. The worst is behind us. Obama’s stimulus plans worked, running up the largest national debt in history worked.
When unemployment drops to 5% or less and you can buy a home again, it may be over, but not until then. Ask the local businesses how things are going. Ask the homeowners how things are going.
No, the Great Recession continues contrary to what the press may want you to believe.
Local and state government does not create jobs that produce anything. It can only tax and spend on social programs. The California state government and Sonoma County government are backrupt right now, they just don’t call it that. They can’t print money, so they borrow it.
With this burden of debt and over regulation in all areas, what business would start up or transfer to this little paradise?
The state and SC have to get their fiscal houses in order before real economic development begins again. That my friends is a very long way off given the left wing political leanings of the elected Governor, state legislature, and Board of Supervisors.
I’m predicting Sonoma County will see an increase of sales of Aztec calendars in 2012, followed by a rapid downturn in such sales in 2013.
No…
the whole County is signed up with ICLEI.
The local implementation arm of the globalist’s sphere of influence.
The Agenda is socially engineered to effect the incremental decline of our economy (and our Civil Rights).
If not for our public official’s allegiance, we could maintain our local sovereignty, and out of necessity remember what community means…and get through it.
As it is, I think most of the sheeple need a shot of testosterone.
In the coming months we’ll find out how dear our freedoms and financial abundance is to the citizens.
Devine intervention, civil intervention, or both.
These times require our involvement.
Step one; the People of Sonoma County have to demand an answer to a simple question.
Why do we belong to ICLEI?
We will continue to ask the question until the silence is deafening.
So, Santa Rosa City Council, time to polish up your propaganda.
Surely ICLEI has some kind of press release they can give you.
@LBR
The bottom fell out on Pelosi’s watch, and Barney Frank’s watch, and the watch of the Democratic congress, as well as Bush who was anything BUT a fiscal conservative (in fact, he was a good liberal Democrat when it came to irresponsible spending).
Even a so-called “lousy field” looks good when compared to an incompetent blamer-in-chief, a misguided wealth distribution zealot with no leadership skills, a trillion dollar deficit spender whose only tactic is to demonize people Chicago-style, and who learned at the feet and in the pews of an America-hating liar. The gullible suckers fell for his line of BS in 2008, but at least some are awake this time and will not be pawns again.
This is the true portrait of the White House clown you support.
Wow! Shooting the messenger are we?
LBR is spot on. These are not “opinions” you can agree or disagree with, these are facts.
Obama WILL win (in my opinion) because the Republicans put their party first, our nation second. JUST LIKE THE DEMOCRATS!
This could have been their opportunity to show America that they “get it” but they clearly do not. So they’ll nominate Mitt “what can I do to get you into this car today” Romney or Newt “who are you going to believe, me or your lying eyes” Gingrich and I will vote for Obama!
There are many factors at play here.
Some of them we actually may have some control over. If things “do get better”
it still will not look like it did in the pre 2005 years. that was a false economy fueled by the greed of the financial services industry. The house (or bankers)
now have over 40% of our wealth and will not be parting with it anytime soon. The government has increased its expenditures well beyond its income at almost every level. Every day we become deeper and deeper in debt.
Yes maybe the damage is slowing and we are learning to adapt and hold our governments and banks more accountable.
That is great but I cant help but feel that we are still in a state of denial.
We are still headed down a self destructive path.
Evidently things will have to get much worse before we ask the questions and take the steps we will need to take.
Only then do I see things “turning around”
we are going to be told what to do
the worst is just beginning
http://www.naturalnews.com/034537_NDAA_Bill_of_Rights_Obama.html
Nothing has changed, why does the Press like printing these fluff pieces?
The economic atmosphere in CA remains awful. Government regulations strangle business growth and expansion. We have seen companies leave the state and/or expand out of state and the idiots in Sacramento have done nothing to change anything. So why would there be any change?
As for real estate, until there is job growth (see prior paragraph) and lending restrictions are lessened, nothing will change. Lenders are extremely tight with the loan requirements (as they should be), thus potential borrowers cannot get approved for loans to buy any new or existing construction.
It is great that someone took the time to compare 2010 to 2011 and write a rosy outlook for 2012 (two days into 2012, with NO change to any factor affecting the economy), but the facts remain that CA is the worst place in the country to start or expand a business which will keep unemployment high. The environment in CA also forces hard workers out of state chasing jobs, leaving behind those who want handouts and government workers, two groups that take from the economy, not drive it.
Worse ??? It has just started. I don’t know what news others read, but I saw the housing downfall coming when mediocre houses were going for $500,000, with incentives to take money and spend, spend, spend.
Well WE, or however you define what got us to this point are the real culprits. Noreen Evans in office ? Are you kidding us or just using a tool for enrichment ? The ‘ Democratic Central Committee ‘ here DECIDES who makes it into office. That is true, the Central Committee decides, and funds and wines and dines their hand-picked ‘front runner’ and lavish then more to the tune of tens of thousands for MILLIONS in return ! That is fact. That is our political system, donate 10K to a candidate, and get the feel good contract worth MILLIONS, with a staff of 50 people to lobby for MORE !!
The worst over ? Even horses with blinders on could see otherwise. We have gone off the cliff of spending, it’s too late. Sorry that the rocks at the bottom are going to hurt.
I know, let’s go spend a half a BILLION on a 1/2 a train ? Are we insane ?
Did you know that the elimination of just a few jobs at a bloated ‘Redevelopment ‘ Agency can fund Annadel Park and more ?
I wish for better, but I see way more handwriting on the wall that we are failing. Our Government has failed our children and grandchildren. The debt is unpayable, add it up.
But don’t light your pellet stove today. Oh my
YOU may be out of work.
YOU may be drowning in debt.
YOU may be losing your house and your car.
But, do not fret, because California political parasites are rewarding their buddies with promotions and PAY RAISES at your expense.
Time for the Press Democrat to report on such things rather than their never ending coverage of petty crime each and every day.
Voters cannot make informed decisions when their “local” paper publishes the usual photos of CHP handing out citations.
Yes, “Lets Be Reasonable,” these political parasites are taking money from Sonoma County tax payers. It IS a “local” issue.
But then, Jerry Brown says he “needs” more taxes???? Why? For more pay raises among the political elite ???
————————–
• Assemblyman Marty Block, D-San Diego, approved increases for three of his employees and promoted another, which came with a 9 percent hike in pay.
• Assemblywoman Diane Harkey, R-Dana Point, signed off on new jobs for two employees, whose pay boosts are in the 5 percent range.
• Assemblyman Ben Hueso, D-San Diego, promoted a field representative whose paycheck will climb by 36.4 percent.
I disagree. I understand those interviewed need to be positive. The north coast economy will remain stagnant for 2012 only because it’s in survival mode. There are no small business owners that I have spoken with believe the future is going to better this or next year. Most of us who still need to produce revenue are just hanging on hoping that the “political” sector is going to create a job producing environment. All the indicators mentioned in the article is dependent on politics and the political sector is in an all time unstable position. If foreclosures are up that means people are not working and have exhausted savings and probably will be leaving the area. If some small businesses are reporting an uptick from last year it’s because they have reduced their work force and cut the fat. Only deep pocket investors that know a specific market are buying and expanding. They are few.
This year we can all expect prices to go higher especially food. Our state,county and locals taxes are going to rise in 2012 mostly to pay for unfunded liabilities which means less and poorer quality services and higher taxes and fees on everything. Small businesses are unlikely to expand or invest because of the current dismissal economic leadership of the our president, governor and board of supervisors. Sadly if this political machine stays in power it could not only be a downturn in the markets and economy but such a radical change in small business activity that California and northcoast life will change forever. We need to stop fooling ourselves and identify the problems and correct them. It’s a very simple business and personal process. You need to create wealth, accumulate wealth and protect wealth. As Americans we are generous people and much of that wealth is given back to our country and society. If you are being economically strangled by the political policies the chances of fulfilling your American dream are greatly diminished. And so goes with the union members but they don’t seem to care. The all inclusive housing industry is critical for the north coast economy. People who buy goods and services live in some sort of housing. To own or rent housing you need a job or income.
In Sonoma County, unless you have the wealth, you can not build a new home or business facility. The planning, permit and multiple exorbitant other fees make the process prohibitive. I would hope that independent and small business architects, engineers, builders, developers, and real estate people start to realize that their careers and businesses could end if they don’t unite and help bring about positive political change. A change from turning the northcoast into a south or eastbay horror show and maintain the rural pastoral landscape. Amen.
Lets Be Reasonable:
Your analysis of politics is purely speculation.
Politicians are out there in force begging us to give them a job.
Politicians = Zero solutions and caustic attacks on one another to cover for their lack of solutions.
Its all about an UN-employed guy or woman who needs a job and politics is a cash cow once you BS your way into some public office.
If a person running for office is UN-employed, a smart voter notices that.
Previous “government experience” counts for nothing. What is that person doing today that proves he/she has actual SKILLS. ???
Lets Be Reasonable:
I know there are people like you who somehow figure that Sonoma County is immune to economic forces at play throughout the Bay region, throughout the state, throughout the country, and throughout the world, but you are wrong.
Perhaps people give my posts the thumbs up because I intentionally bring news to their attention that the Press Democrat has routinely attempted, over the years, to filter and prevent people from knowing about.
Planned job cuts of 100,000 by the US Post Office and 3,000 closures of small post offices WILL affect Sonoma County.
Before you posted, did you stop to think about what would happen if the Sonoma County Sears store gets closed along with the other planned closures as yet unidentified?
Did you stop to think, before you posted, what would happen if the Sonoma County K-marts get closed which they might.
Both Sears and K-mart are at risk of total bankruptcy and liquidation.
THOSE ARE SONOMA COUNTY JOBS.
Did you even stop to think about that before you posted that I was not talking “local” enough for you ???????
THINK ABOUT THIS. The Press Democrat is/has been sold. Do you even know what usually happens when companies are sold?
LAY OFFS. JOB CUTS. FORCED EMPLOYEE TRANSFERS AWAY FROM SONOMA COUNTY.
Did you stop to think, before you posted, at all???????
Tip: When facing risky times, keep your eyes open. Pretending that Sonoma County is an island of calm is foolish.
I agree with the article. The worst is over. Steady recovery for our economy because we have a nice foundation infrastructure in place and we have a diverse mix of jobs in areas of high tech, medical, agricultural, tourism (not to mention it is gorgeous around here). We need more businesses to tax rather than more tax on businesses. Perhaps 2012 will see some more activity in small to medium manufacturing startups with the expanded freight carrier opportunities as our airport upgrades and our rail and highways can move products more efficiently. I am bullish on our area!
When the Press Democrat folds its tent and the Florida group restarts with a daily shopper, things will improve. I’m hoping for an objective newspaper. We’re probably doomed.
@Money – this article is about Sonoma County – why are you listing national stuff? And why are so many giving you thumbs up when you are just spouting negative facts – are folks happy that the economy is not better!?
.
@Missy – normally, a president running for re-election with these kinds of unemployment numbers would not have a chance, but I think you might be surprised this time. First, the Republicans have a pretty lousy field. Do you nominate Santorum – the last ‘true’ conservative left standing (who independents will not vote for) or Romney, who no one is really excited about? Second, most in the country place the blame for the economy on Bush, since the bottom fell out on his watch. Third, no recent (last 70 years, or so) incumbent president has lost a general election when there was no primary challenger.
Isn’t it amazing that because it’s time to flip the calendar over that that means the economy will be better. Reality is that only one day has passed. Hardly a reason to think that because that new day is in a different year that things will be better.
Two things are happening right now. One is that BO is pouring congressional money into the economy due to this being an election year. High unemployment would mean he’s tossed out on his ear and he doesn’t want that. So our economic debt is getting higher and higher.
Secondly, it is still the end of the Xmas season and they do not have the correct numbers for the economy without the Xmas season yet. But BO & his spinners are spinning a seasonal bump into the economy is “growing” & getting better(!!). None of that is correct until we get actual real numbers which won’t be posted until March or April.
Third, from the article here “This year the unemployment rate is expected to fall to 8.9 percent” – that’s still high. I can remember the PD and it’s liberal minions screaming at GWB that the 8% unemployment rate was horrific and a nightmare, but since Barack Obama is in office and the Dems run California, it’s all ok with them and the liberal supporters here.
Some time or another we will learn that building houses does not create jobs due to the simple fact that a new home requires a new family to enter the economy.
And, that means that a new job has to be created to enable that new homeowner to be able to afford that new home.
When homes sell, new, for $250,000 that new job must pay about $6,000 a month, and exactly how many new jobs will pay that much a month.
House price will, I do believe, fall to where the average , or median salary, will be 1/3 of the median price of the home.
Which, if I am correct, would appear to mean that the average home in Santa Rosa would be in the range of $100,000-150,000 valuation.
For you who believe otherwise,you should learn from history here in Santa Rosa when the houses in Oakmont sold for $14,500, and homes in Saint Francis sold for $25,000.
But, I may be wrong and the homes may go to $1,000,000 and we will all be millionaires based upon the inflation of the home prices.
Hmmmm, seem we have been through that in the last 4-5 years, doesn’t it?
And didn’t that work out well?
A good example of how worthless politicians and government can be is in this mornings news.
“Gingritch says Romney would buy White House if he could.”
Uh, yeah. Thats providing the voters with a solution to problems, isn’t it?
Politicians are great for providing zero solutions and screaming about problems. Just like the Press Democrats “guest author” of a couple of days back. Lots of chants without any solutions.
Government = a major part of our troubled lives.
Is the economy on the mend ?
Ask the postal employees. The PO is attempting to cut 100,000 postal employees right now and close over 3,000 post offices.
Ask the employees of Sears. Sears / Kmart has already announced the CLOSURE of three Sears stores in San Diego County with more on the chopping block but not yet announced.
In fact, Sears credit rating was just lowered to “junk status” by Fitch. That will hasten their closings because vendors will now be demanding payment up front before shipping to Sears.
The Associated Press, AP, just reported two days ago that real estate values have continued to fall in most markets.
The writing is on the wall. The American economy is failing and won’t be returning to what it once was. The reason? Simple. Competition from low wage countries abroad.
Anyone who thinks that mere labor unions or the Feds can stop a world economy shift has been brainwashed by politicians who can not do anything except beg us for a job to keep employed themselves.