Californians can expect a slight increase in job growth, according to Chapman University economists. During the presentation of the 47th annual Economic Forecast on Dec. 12, President Emeritus Jim Doti predicted that, nationwide, there would be slow economic growth and an inflation rate hitting 3% by year-end 2025.
Doti and Argyros College professors Fadel Lawandy and Raymond Sfeir made their predictions to an audience of Southern California business leaders, economists and special guests.
“While inflation is expected to rise, the Federal Reserve will likely hold off on substantial rate cuts,” Doti said. “The effects of earlier rate hikes will persist, but we anticipate a stable economic environment.”
Real GDP growth is expected to slow to 1.8% in 2025, down from 2.7% this year. Despite tighter monetary policies, deficit spending continues to bolster consumer income, mitigating the risk of a recession.
In addition to the national forecast, the presentation included projections for Orange County and surrounding areas.
Doti said there will continue to be slow economic growth in Orange County. Advanced jobs, which pay two or three times the average wage rate, are practically flat in Orange County at .4% growth. LA County is faring worse with -3.3% growth, while San Diego County, San Francisco and San Jose are much higher at 3.7%, 2.1% and 6.2%, respectively.
However, one strength in Orange County is in the medical technology industry, with the county being ranked the highest of 50 different metropolitan areas that Doti’s team tracked.
Doti also made a number of forecasts for Orange County’s 2025 housing market, including that home sales would only slightly increase from 22,400 in 2024 to 23,100 next year. This is a steep decline from the 38,600 sales in 2021.
“People are not putting their homes up for sale and for good reason, we calculated the present value of a mortgage at 3% for 30 years versus what they are at 6%, and the present value of that asset is $800,000,” he said. “People don’t want to lose that.”
Doti is also projecting a slight drop in home prices, with the median price dropping about 1%. He traced that difference to housing affordability.
In 2024, Orange County dipped below 50% in the housing affordability index, which means that median family income in the county is 50% of what’s necessary to purchase a median-priced home.
“Very few areas in the nation have anything that low,” Doti said.
Alexander E. Hayden School of Real Estate
Also at the forecast, Doti was joined on stage by President Daniela Struppa and president-elect and current Vice President and Chief Advancement Officer Matt Parlow to celebrate the opening of the Alexander E. Hayden School of Real Estate.
Established thanks to a $5 million gift from alumnus Alex Hayden ’95, the new school is intended to bring national and global cachet to Chapman’s real estate profile, recruit top faculty in the field and create an environment where the university’s real estate students have the highest-quality programming, connections and success. The Hayden School will be the first school named in honor of a Chapman alumnus.
“It is a transformational gift that propels us forward, helping us to surpass the $400 million milestone in our comprehensive campaign,” Struppa said. “We are grateful to Alex for this lasting impact.”
Hayden thanked his grandparents along with the many Chapman donors who helped make his own education possible.
“We have so many real estate employers here,” he said. “This ground is so fertile to educate the next generation and have them get jobs. I really want to inspire the industry to keep giving back and being committed to people’s education moving forward.”
Presented by the A. Gary Anderson Center for Economic Research, this is the 47th year for Chapman’s Economic Forecast, which has established itself as one of the most accurate and trusted in the nation. The forecast holds an impressive track record among Blue Chip survey participants and is celebrated for its precision in predicting trends in real GDP, unemployment rates and housing statistics. The full Economic Forecast presentation is available to view online.
