GROWTH AHEAD FOR REGION SANTA CLARITA VALLEY ECONOMY MAY CREATE AS MANY AS 5,100 JOBS A YEAR.

Byline: Eugene Tong Staff Writer

VALENCIA - Both the Santa Clarita and the Antelope valleys will see the economic growth from recent years continue into 2006, though gains in home prices, and consumer spending could slow, according to an annual regional forecast released Thursday.

The 2006 North County Real Estate and Economic Outlook said rising interest rates and a decrease in real estate speculation will slow demand for homes in the region. But steady job and population growth and the continued housing shortage prop up the market in the coming year.

``We do not have a bubble-bursting scenario,'' said Mark Schniepp of the California Economic Forecast based in Goleta, presenting the data at an annual economic conference at the Hyatt Valencia.

Short of a falling out, the result is smaller gains in the near future. The 2006 median home price for the Santa Clarita Valley is forecast at $637,000 - an 8.3 percent increase from 2005, continuing the move away from double digit gains. It would slow further in 2007 to 6 percent.

The Antelope Valley, where home prices have lagged behind - $271,000 separates its median from that of the Santa Clarita Valley - will sustain larger gains in the short term as homebuyers priced out of the Santa Clarita Valley flock there.

The long view is harder to predict, though forecasters say annual appreciation cannot be sustained as the median price for both valleys would hit $1 million by 2010.

``There is some indication that the market is slowing in Southern California,'' Schniepp said. ``But there is not a real trend yet. ... We're watching this very closely.''

The forecast said the Santa Clarita Valley economy could create between 4,300 to 5,100 jobs per year between 2006 and 2010 - an annual growth rate of between 4.6 percent and 5.7 percent, compared to 0.6 percent to 0.7 for all of Los Angeles County.

For the North County region, the tally is 7,000 to 8,000 jobs per year.

Distribution and warehousing may increase as firms relocate, and demand for service jobs could spike along with a growing population, the forecast said. Both valleys are now home to a combined 567,700 - it could increase to 635,500 by 2010.

Meantime, consumer spending has slowed as they contend with higher interest rates and higher living costs while personal income growth slowed.

``The (economic) slowdown is not imminent, it's here,'' Michael Bazdarich, senior economist with the UCLA Anderson Forecast, said at the conference. ``It's a mixed bag for California.''

Bazdarich believes short term interest rates have already peaked - both the short and long rates will fall again in the near future. He argued long term rates over 150 years never deviated far from 4 percent to 4.5 percent - they only spiked beginning in the 1970s.

``Housing is still the star of the economy, but you're still going to see signs of deceleration,'' he said. ``We're building more homes than we can sustain, but this is not what we're seeing in California. ``California home sales - on total - are holding up really well. Much of the pickup is right here in the Santa Clarita Valley.''

Larry Mankin, president of the Santa Clarita Chamber of Commerce, said local development including the Downtown Newhall redevelopment - it would add 300,000 square feet of new commercial space to old city center, and the Valencia Town Center expansion - 150,000 square feet of new retail - will help shore up white collar job growth.

``We are becoming snobbish as a community,'' he said. ``This is a community that is more concerned about quality (of jobs.)''

Local commercial building vacancy rate is 5.5 percent - down from 9.5 percent a year ago to 5.5 percent, Mankin said.

Eugene Tong, [phone]

eugene.tong(at)dailynews.com