Business fixated on housing

first_imgUNIVERSAL CITY – Local business leaders packed a hotel ballroom Thursday to hear an economic forecast about job rates and inflation, but home prices were what seemed to be on the tip of everybody’s tongue. Speakers at the 2007 San Fernando Valley Economic Summit at the Sheraton Universal Hotel focused on price declines (deeper in some areas), interest rates (look for an end-of-the-year adjustment) and how this housing downturn compares with those in the past (prices won’t fall as far). Five of eight breakout sessions addressed real estate. At one session, state Real Estate Commissioner Jeff Davi, who oversees licensing and regulation of real estate brokers and agents, said housing prices would inevitably inch up after the current cycle plays out. For the meantime, he saw one positive angle to level prices. “Housing prices staying flat are a good thing for businesses looking to hire people,” Davi said. At another session, panelists lamented a shrinking pool of industrial real estate and predicted shifts north to the Simi, Antelope and Central valleys. Industrial land is often also zoned for commercial, which fetches higher prices per square foot. “Industrial is going away unless something happens,” said John Degrinis, an executive at a commercial real estate organization, Collier International. The preoccupation with real estate is tied to what Valley companies said, during a survey, was the No. 1 issue they face: finding skilled workers. The survey polled 70 midsize businesses and was conducted by Davis Research as part of an annual economic forecast released Thursday from the San Fernando Valley Economic Research Center at California State University, Northridge. One-third of those surveyed said not being able to find enough employees topped their list of concerns, followed by 23 percent listing the rising cost of labor and health insurance. High residential real estate prices make it difficult for businesses to find a location where employees can afford to live. Long commutes, in turn, deter prospective workers and create a labor shortage. Debbie Kukta, vice president of Trojan Rivet Corp., said few of her employees can afford to live near the company’s factory in Glendale. Rivet has a task force to address the issue but there is little the company can do. “We try to pay them the highest wages we can,” Kukta said. But prices are “out of our control.” Douglas Snider sees another side to the story. As president of Wireless Applications & Management Corporation in Calabasas, he turns to regions with high housing prices because that’s where potential clients live. “For my target, it attracts the right clients,” Snider said. julia.scott@dailynews.com (818) 713-3735last_img read more