Merced’s economy is showing signs of recovery, with recent figures pointing to improved housing prices and employment rates, although the city has a long way to go to bounce back from the recession and the bursting of the real estate bubble.
Numbers reported from August showed the city’s unemployment rate at 9.7 percent, according to the Bureau of Labor Statistics. While that’s well above California’s rate of 6.1 percent for the month, it is significantly better than the 11.3 percent Merced reported in August 2014, and 12.9 percent in August 2013.
Mark Purnell, co-owner of Five Ten Bistro, said his downtown business is feeling the improvement.
“As far as growth, I think we’re doing well,” Purnell said. So far this year, sales have been up about 5 percent each month compared to the same time last year, Purnell said Monday. The eatery is in its third year, and the future looks promising, he said.
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He’s not the only one predicting growth in the region.
A report released last week by University of the Pacific’s Center for Business and Policy Research says Merced will see nonfarm employment increase by 1.6 percent through the end of the year. Employment is expected to grow an average of 2 percent each year between 2016 and 2019, according to the the quarterly report.
Along with more people being employed, the report said personal income is expected to increase by 3 percent.
Despite the state being in its fourth year of a drought, the agriculture industry has continued to be profitable. That shows “market conditions are more powerful than the weather for the agricultural economy,” said Jeff Michael, the center’s director.
Merced also ranked in the top 10 of all cities in the country in its housing-price increases in September, according to Pro Teck Valuation Services. The average selling price in September was $210,000, which is an increase of more than 15.5 percent compared to the same time last year.
Home sales continue at a brisk pace, but commercial property sales are lagging, said Terry Ruscoe, owner of Merced Yosemite Realty in Merced.
“As prices increase, more and more homes under water become valuable again,” he said.
The housing market has been improving for years, but it was almost entirely driven by outside investors. More recently, he said, the number of local people buying has increased.
One example of an improving housing market can be found in Ruscoe himself, who recently opened a second office for his company. “Because of the demand, we just couldn’t handle the amount of traffic and number of agents,” he said.
As housing prices increase, so does the cut of tax dollars that funnel through the county on its way to the city. Brad Grant, Merced’s chief financial officer, said the home price increases are not enough to see gaudy tax dollars. But, every little bit helps.
“It’s slow in coming, but it’s a good thing,” he said.