Over the past 40 years, Sonoma County and the U.S. benefitted from key innovations linked to the Space Race and the booms in food and wine, tourism and the high tech industry.
In contrast, the main innovations of the last decade were new ways of repacking home loans and other forms of credit, said Ben Stone, the county’s economic development director.
Stone, speaking to local real estate agents, joked Tuesday, “There was a lot of innovation. In fact, you’re reading about it now from Goldman Sachs, much to their regret.” He was referring to newly released e-mails in which the company’s executives predicted a windfall from bets they had placed on a drop in the housing market.
Stone’s point was that the credit derivatives and easy credit didn’t produce lasting benefits, but instead contributed to the worst financial crisis since the Great Depression.
So what lies ahead?
“Better Times Coming” was the informal theme of Stone’s message Tuesday morning at the North Bay Association of Realtors.
The county’s unemployment rate should begin to peak later this year and to start to drop in 2011, he said. Business leaders appear more optimistic about the coming year and the county can look forward to future job growth, especially in such areas as green technology, bio and life science, tourism and health care.
Despite the upbeat tone, Stone did note conditions that are likely to hinder prosperity. They include a massive national debt, a weak dollar and the prospect of higher taxes.
“Our standard of living will probably decline,” he said. When the better economic times come, they probably won’t be as robust as four or five years ago.
For the real estate industry, new opportunities will arise not only from the brightest of the job sectors but also from investors from both Asia and Canada. The weak dollar will make county properties look more affordable compared to other parts of the world, Stone said.
Sonoma County has seen a net increase of people during the past two years, Stone said. The reason is the county is now a more affordable place to live than most of the Bay Area, he said.
He suggested that affordability is largely due to the large drop in median home prices, which are down 43 percent from the peak in August 2005. The county’s median single-family home sold in March for $349,000.
— Robert Digitale