2006 THE YEAR IN BUSINESS SEESAW IN SOUTHLAND.

Byline: BARBARA CORRERA Staff Writer

Business news impacts people's lives more than they sometimes realize. After all, economics is really the study of consumer behavior. Based on that, we have come up with a list of regional business stories that impacted Southland consumers this year.

1. Housing market returns to reality

You certainly can't call it a bust. What's happened to Southern California residential real estate over the past year is a return to normalcy after years of insane appreciation and sales activity.

Remember back in January 2000? That's when the average single-family home in Los Angeles was selling for about $198,000. By October of this year, that house had almost tripled in value, to about $583,000.

What does all this mean for consumers? Essentially the tables have turned and it will be a buyer's market for the foreseeable future as sellers rachet down their profit expectations.

This may be the last year in a while for measurable home price appreciation in Los Angeles County. Home prices have continued to rise, but by smaller and smaller percentages, while overall sales have slowed dramatically. In October, the median price for a single-family home in California was $548,680, up 2 percent from the same month last year, the California Association of Realtors reports. For the same period, sales activity dropped off by almost 30 percent.

That was the basic pattern in Los Angeles County, where year-to-year prices continued to rise slightly, while sales fell 25 percent from last October, and were down 15 percent from September. In San Bernardino/Riverside counties, prices were holding steady, but short-term sales activity actually rose 10 percent from September. Year-to-year sales, however, showed an even more dramatic decline than in Los Angeles. In Ventura County, home prices fell marginally in October from the previous year and sales activity for Ventura was up 7.2 percent from September, but down 20 percent from last year.

2. Building for the future

When voters in the Nov. 7 election approved more than $40 billion in bonds to rebuild the region's infrastructure, they gave the thumbs up to the state's largest-ever public works overhaul.

The money, to be spent on low-income housing, transportation, levees, roads, schools and water projects, will impact every resident of Southern California. It will repair highways and complete car-pool lanes, expand public transport, fund traffic-congestion relief projects, air-quality improvement and anti-terrorism security at the ports.

Pet Metropolitan Transportation Authority projects, such as the widening of Interstate 5 from the Orange County line to the 605 Freeway, are getting a lot of attention. But the details of how the funds will trickle down to each project and when has yet to be decided by the state Legislature.

Aside from the bond measures and future improvements they will fund, other major transportation projects went full steam ahead this year.

Los Angeles International Airport broke ground on its effort to move its southern runways and began renovations on the Bradley International Terminal. And the MTA started work on the Mid-City/Exposition Light Rail Transit Project, the first modern-era rail connection to West L.A. via Robertson and Exposition.

3. Pain at the pump

Gas prices broke all records in 2006, hitting a peak last May, when a gallon of gas reached $3.39 in California. And while prices have calmed substantially since then, we're still paying more than we were at the beginning of the year. Californians are also paying a good 40 cents more per gallon than the national average, at a cost approaching $50 to fill up an average sport utility vehicle.

The government blames the price fluctuations on skyrocketing crude oil prices this year, constantly increasing demand for gas and not enough refineries to meet demand. But most locals have their own theories, usually involving some price collusion by oil company-owned gas stations. Regardless of the reason for high prices, they prompted many consumers and commuters to think about switching from gas hogs to leaner driving machines.

4. Soaring stocks

And now, a feel-good story for anybody with a 401(k). On a tear since summer, stocks finished the year in record territory, beating even the gains made during the dot.com era.

The Dow Jones industrial average has jumped more than 2,000 points since July; the Nasdaq is up more than 20 percent for the year, and the Standard & Poor's 500 rose 15 percent since its June bottom. The rosy performance is due to a mix of factors, including falling energy prices, strong corporate profits and a perception among investors that interest rates have peaked.

Of course, things could sour in 2007. Pessimists are already issuing some gloomy forecasts for next year, following what they call stocks' ``extreme overbought'' condition through October and November. No need to get skittish, however. It's called long-term investing for a reason.

5. A Lonely Girl Named Bree

While Hollywood celebrated the return of U.S. box office success in 2006, one brilliant Internet innovation stole the show. It's called YouTube, and it's a simple idea: a free video-sharing Web site that lets users post clips of themselves doing, well, what they do.

Founded by three former PayPal employees, the company last year received several million dollars from angel investors -- high net-worth individuals who invest in entrepreneurial companies, usually at an early stage. Over the summer, the site exploded even faster than MySpace did, driven largely by widespread fascination with one particular contributor: a 15-year-old girl who calls herself Bree.

Lonelygirl15, her online ID, started posting video blogs on YouTube in June, alluding to her strict, home-schooling parents and sharing her relationship drama. Early fans wondered whether Bree was for real, but her true identity, an actress from New Zealand named Jessica Rose, wasn't revealed until September.

Although there's nothing necessarily profound about the Lonelygirl series, its popularity proved the power of the Web to unite viewers.

It also landed co-creators Miles Beckett, Mesh Flinders and Greg Goodfried representation by powerhouse Hollywood talent agency Creative Artists Agency, blazing a new trail for independent filmmakers everywhere. Jessica Rose was recruited by the United Nations for an antipoverty campaign.

The Lonelygirl episode also helped catapult YouTube to startup heaven: The company was bought by Google in October for $1.65 billion in stock.

6. Studios pass out the pink slips

Local entertainment lost a bit of its status as the region's top employer this year. First, The Walt Disney Co., based in Burbank, eliminated 650 jobs from its movie division in July, half of them international positions. The studio also reduced its feature-film slate from 18 releases per year to about a dozen.

Then in October, NBC Universal, also in Burbank, announced a major reorganization that includes 700 layoffs -- about 5 percent of its total work force -- and plans to slash $750 million in annual expenses.

The plan is to eliminate all scripted shows from the 8 p.m. time slot in favor of cheaper-to-produce game shows and reality programs. The move will consolidate operations on both coasts, freeing the studio up to reinvest in digital technologies.

7. Box office is back

When box office receipts slumped in 2005, there was a lot of talk about Hollywood misfiring with the public. Well, this year signals a turnaround, as such blockbusters as ``Pirates of the Caribbean: Dead Man's Chest'' and ``Cars'' sent domestic grosses back into positive territory. Year to date, the box office is up 3.5 percent over 2005. In addition to the ``Pirates'' sequel and Disney's ``Cars,'' three other films crossed the $200 million mark for 2006: ``X-Men: The Last Stand,'' ``The Da Vinci Code,'' and ``Superman Returns.''

Runaway production remained a problem throughout the year, with such venues as Morocco and Iceland battling Canada to lure film production work out of the local economy. But the region is working hard to keep shoots close to home. One bright spot: The Inland Empire Film Commission reports that crews for ``Mission: Impossible III'' spent 27 days filming at the wind-turbine generators near Palm Springs.

8. Don't eat your spinach

In September, E. coli in spinach grown in the Salinas Valley caused 199 infections, three deaths and 31 kidney failures nationwide. The spinach scare prompted massive recalls of spinach and layoffs at growers. The cost to spinach growers in California, where three-quarters of all domestic spinach is grown, is expected to reach $74 million.

The outbreak also led to greater scrutiny of produce, in turn producing other produce scares. In early December, San Francisco-based Jamba Juice warned that one of its suppliers -- Cleugh's Frozen Foods of Salinas -- said some frozen strawberries tested positive for listeria. And just a few weeks ago, E. coli was found in food at Taco Bell restaurants. Taco Bell officials had identified green onions grown near Oxnard as the source but federal officials subsequently pointed instead to lettuce.

9. The year in retail 2006

It was a big year for retail news. Federated Department Stores Inc., parent company of Macy's and Bloomingdale's, started converting and selling the 44 May Company stores it bought in 2005, changing the retail landscape from Canoga Park to West Covina.

In addition, shopping mall giant Westfield opened the Topanga mall extension in time for the holidays. A new wing of the mall has a Target and a Nordstrom, and will get a Neiman Marcus in 2008.

Ground broke last summer on the Baldwin Hills Regional Shopping Mall, an update on the Baldwin Hills Crenshaw Plaza, set to be unveiled next year. Barneys New York Co-Op announced it would open its doors at The Grove in March 2007, and if that weren't hip enough, discount Swedish fashion retailer H&M opened its first Southern California store in Pasadena in September.

10. C-17 gets fresh funding

Just one month after Boeing Co. announced plans in August to shutter production of its C-17 military planes in Long Beach, Congress approved $2.1 billion for 10 more of the troop transport and cargo planes.

The decision was made following intense lobbying by Chicago-based Boeing, Gov. Arnold Schwarzenegger and a coalition of Long Beach community leaders, led by Mayor Bob Foster. The restoration of funding will save about 5,500 Boeing jobs at the Long Beach facility, plus around 500 more at subcontractors throughout the region, such as Vought Aircraft in Brea.

Meanwhile, Boeing shut its 717 line this year in Long Beach, marking the end of the last commercial airplane built in California.

barbara.correa(at)dailynews.com

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THE TOP 10

1 The housing boom cools

2 Infrastructure bond measures

3 Record gas prices

4 Soaring stock market

5 Lonely Girl/YouTube phenomenon

6 Box office returns

7 NBC, studio layoffs

8 E. coli, spinach scare

9 The year in retail

10 C-17 gets fresh funding

CAPTION(S):

7 photos, box

Photo:

(1 -- 7 -- color) no caption (2006 photo collage)

Photos by:

John Lazar/Staff Photographer (NBC and gas prices), David Sprague/Staff Photographer (house for sale), Getty Images (stock market), Tom Mendoza/Staff Photographer (traffic on the 101),Leo Hetzel/Staff Photographer (C-17) and Associated Press/(youtube.com (Lonely Girl)

Box:

THE TOP 10 (see text)