It may be a distant memory for some, but the recession of 2008 is still all too clear for others.
The beginning of the recession damaged many businesses irreparably; some barely survived, a few flourished, but many closed. Even those not directly affected felt the pain as diminishing equity and stock market losses took their toll. Psychologically the aftermath lingered for many years.
In looking back at the 2014 business environment in Newport Beach, did the Newport Beach business community move on or does the memory of six years ago haunt us still?
For the answer, I went to Newport Beach Chamber of Commerce President and CEO Steve Rosansky. A former councilmember, he joined the chamber in 2013 after his term on the council ended.
“Overall business has improved the past two years, with sales taxes up, a good surplus of city revenue, solid room bookings for our hotels and food as well,” Rosansky shared. “Office rentals are also up, vacancies are down, and to coin a phrase, everyone is ‘cautiously optimistic’ for the future.”
The expectations and optimism levels are high and it appears there is a lot of silver lining, and not a lot of gloom.
One of the indicators of a growing economy is discretionary spending, which shows up in home improvements, dining out more, and social events following suit. The kid’s parties that used to be held at home are now shifting to outside venues.
The effect is more toys for girls and boys of all ages, which is great for jewelry and auto dealers.
I asked Patricia R. Moore, executive vice president of the Newport Beach Association of Realtors, about real estate stats through the end of 2014.
“Home values are certainly up,” she told me. “If we look at the list price numbers for the past three years, we’ve seen them grow from $2.1 million to $2.5 million in two years. Sales prices follow suit, finishing 2014 at $2.1 million through November, 2014.”
Since the annual Christmas Boat Parade just concluded, that topic was discussed with several people. The question of “How many people come in to the city?” is a tricky one since it’s all anecdotal and the only way to measure is with lodging and restaurant activity. As expected, both are up and we will remain at the one million visitors mark.
Economic growth is cyclical and has been for as long as it’s been tracked. When the economy is bad, we think it will never end, but it does. When things are good we sometimes have “irrational exuberance,” a term coined by former Federal Reserve Board Chairman Alan Greenspan when he described the euphoria during the dot com bubble from the 1990s.
We saw it in the early 2000s as well with real estate prices.
For now, we seem to be in a period of steady and healthy growth in Newport Beach. The hyperinflation that was projected for several years is not evident and, except for isolated countries, the world market is somewhat stable as well. We will have a new administration and president in the near future, but until that time, the next two years should be more of the same.
On a more personal note, Happy New Year, let’s make 2015 a prosperous one.
Stay positive and shop local!