Thursday, June 30, 2005

Business - Long-term prosperity seen for Sacramento area

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The Sacramento region's economy will more than double and its population will soar to 3.5 million by 2030, predicts a new forecast being released today by the University of the Pacific's Business Forecasting Center.

Personal incomes for residents of El Dorado, Placer, Sacramento and Yolo counties will also grow above the state average of 6 percent, rising to a total $350.1 billion in 2030 from the current $70.1 billion, the Stockton-based university center predicts.

Sean M. Snaith, an economist who oversees the Business Forecasting Center in the Eberhardt School of Business, released the projections for the Sacramento economy along with his center's quarterly economic outlook for the state.

'Some of the highest growth regions in the state will be found in California's Central Valley as economic muscle will be added to the agricultural backbone of this region,' Snaith said in his report.

The state's short-and long-term economic prospects remain solid, but the red-hot housing market could cool and even deflate a little over the next few years if mortgage interest rates rise, Snaith said.

Contradicting a recent study by the University of California, Los Angeles, Snaith said that the housing market has not entered a bubble phase, adding that there will be no crash in home prices as dramatic as the Internet stock market correction.

Instead, Snaith likened the California and Sacramento housing markets to a fast-rising souffle.

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