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Report: Tourism boosts SCV markets in tough economy

Posted: October 11, 2011 3:31 p.m.
Updated: October 11, 2011 3:31 p.m.

In this May file photo, riders on the final leg of the AMGEN Tour heads west on Newhall Ranch Road toward Ventura.

 

On Santa Clarita’s economic front, tourism is strong, home and condominium prices rose, filming is up and there was an increase in sales-tax revenue.

Meanwhile, the Santa Clarita Valley Economic Development Corporation’s Economic Snapshot report for July showed the unemployment rate remains static, and there are still no signs of recovery in the commercial real estate market.

Hotel-occupancy rates for July were 90 percent, higher than San Fernando Valley, Pasadena, Long Beach, San Gabriel Valley and the Los Angeles regions. Local average daily room rates only increased 2 percent from the previous year to $106.45.

The strong showing resulted in the city of Santa Clarita collecting $253,386 in transient-occupancy taxes in July, up 12.5 percent from the prior year.

“The big news is the continued strength of our tourism sector. Hotel occupancy has been extremely high, and daily room rates are strong,” said Jonas Peterson, president/CEO of the SCVEDC.

“This reflects well on our economy, Six Flags and the community’s ability to attract ongoing events,” Peterson said.

The increase in occupancy also coincides with the increase in filming permits, which were up 8 percent for the month of July. The 28 permits issued represented a total of 59 filming days for the month, 42 percent of which were for television productions.

The estimated economic impact from location filming in July alone was $1.32 million.

Sales-tax revenue generated in the first quarter of 2011 was up nearly 5 percent from first quarter 2010, representing $5.85 million.

On the housing front, average home and condominium sales prices rose in both the Santa Clarita Valley and the city of Santa Clarita, regaining some ground lost from the beginning of the year.

While single-family home prices remained unchanged in the SCV between July and June 2011, condo values increased 9 percent.

In the city of Santa Clarita, single-family home prices were up 4 percent over June, and condo prices rose 6 percent.
As prices increased, the number of single-family homes and condos decreased valleywide. Default notices recorded between July 2010 and 2011 dropped 32 percent.

Apartment-vacancy rates dropped to 6.5 percent, as well, from 8.8 percent in the first quarter of this year. The average rent decreased slightly.

The commercial real estate market remains stagnant. No new permits for commercial space were issued in July, and there was no growth in certificates of occupancy year-over-year.

The city fared slightly better than the SCV with commercial vacancy rates, with office vacancies representing the highest chunk of commercial space availability in the second quarter.

Industrial vacancy rates sit as low as 6 and 5.4 percent in SCV and city respectively; and retail vacancy rates came in at 7.4 and 6.8 percent, respectively, as well.

Unemployment for July rested at 8.3 percent, slightly lower than the 8.2 percent hit in July 2010.

Santa Clarita’s unemployment rate, however, is much lower than all surrounding areas, including 13.3 percent in L.A. County, 12.4 percent statewide, 11.6 percent in Glendale and 10.1 percent in Pasadena.

The SCVEDC also announced that future Economic Snapshot reports will reflect more regional information.

“We’ve been working with the County to include even more regional indicators in future reports,” Peterson said.

“Next month we’ll start tracking sales tax collections along with commercial, residential and film permitting from the unincorporated areas.”

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