The mortgage crisis that’s creating waves of foreclosures and tighter access to credit nationwide will affect the local economy, but don’t look for an Inland Northwest recession in 2008, economic forecaster Shaun O’L. Higgins told an audience in Spokane Valley on Wednesday morning.
“We’re going to continue to see growth and we’re still on a positive pattern,” Higgins said in a presentation at the Greater Valley Economic Outlook Conference. Higgins is director of sales and marketing for The Spokesman-Review and a longtime local economy-watcher.
He’s looking for growth of 2.1 percent in total economic activity in Spokane this year; it would have been 1 percentage point higher, or 3.1 percent, if the mortgage crisis weren’t a factor, he said, basing his forecast on a report released by the U.S. Conference of Mayors. Coeur d’Alene fares better: Higgins expects its economy to grow by 2.5 percent with no impact from what he calls the “mortgage mess.”
He said in a later interview that Coeur d’Alene might be seeing so little impact because “the homes there were properly financed,” meaning buyers took out conventional mortgages rather than the subprime loans that have created problems nationally.
While the mortgage crisis was sparked by a downturn in many once-hot real estate markets nationwide, locally, real estate is still on solid footing, he said. He expects housing prices to rise by an average of 3 percent in Spokane County this year, while they will remain even with 2007 in Kootenai County. The number of sales should fall, but still will exceed long-term averages, he said.
The number of jobs also should grow, with employment expected to be up about 2.1 percent in Spokane County – translating to an additional 4,700 jobs – and up about 2.5 percent in Kootenai County, or 1,400 jobs.
Job growth locally far outstripped the U.S. average from 2006 to 2007, he noted. The number of jobs nationally grew 1.3 percent during that time, while the growth rate was 2.6 percent in the Spokane metropolitan area and 3.6 percent in the Coeur d’Alene area.
Long-term, it’s impossible to say whether the Inland Northwest will be caught up in a broader national and global economic downturn, Higgins said. But 2008 “is going to be a pretty good year,” he said. “There’s no recession foreseen here, at least not from me.”