This year could see yet another jump in home prices amid rising unemployment and gas prices, a group of local experts is predicting.

We asked our Econometer panel of San Diego business leaders and economists to predict what the economy will look like in the coming year. Detailed forecasts are listed at the bottom of the article.

At the start of 2023, the panel also made predictions — and came close to calling how the year would end.

For the price of oil ($71.65 per barrel, as of Dec. 29) and the Dow Jones Industrial Average (37,689 as of Dec. 29), Norm Miller was closest with his prediction of $73 and Lynn Reaser was closest with her prediction of 35,000, respectively. David Ely and Austin Neudecker both predicted the San Diego County unemployment rate of 4.2 percent in November. No one guessed the county’s median home price of $850,000 (as of November), but three came close at $800,000 — Haney Hong, Bob Rauch and Jamie Moraga.

Question: What economic indicator will you monitor most closely in 2024?

Chris Van Gorder, Scripps Health

The 10-year treasury note: Mortgage rates closely follow it, and housing is a huge part of our economy. The 10-year note is also terrific to use to understand what the market thinks of the chances of long-term growth and is helpful for gauging recession risk too.

Jamie Moraga, Franklin Revere

The Consumer Price Index: The CPI is a measure of inflation and can be used as an indicator of the effectiveness of economic policy as well as a tool to formulate fiscal and monetary policies. The CPI measures changes in consumer prices and can help determine what is getting more expensive for the average consumer. It is also one of the indicators utilized by the Federal Reserve to determine if they will raise or lower interest rates in the future, especially if they desire a soft landing in 2024.

Norm Miller, University of San Diego

Interest rates: In 2024, we will all be watching interest rates and inflation, with the hope that interest rates will be falling. We need mortgage rates to drop well under 6 percent for the housing market to pick up significantly. This will also curtail refinancing struggles and possible foreclosures in the commercial real estate sector.

David Ely, San Diego State University

Inflation: Inflation slowed last year but remains above the Federal Reserve’s 2 percent target. Fed officials project that both PCE (personal consumption expenditures) inflation and core PCE inflation will stand at 2.4 percent in late 2024. With inflation subdued, the Fed can be expected to lower their target interest rate in a series of steps this year, which will impact the broader economy. However, the timing of these rate reductions is consequential and will depend on actual inflation patterns.

Ray Major, SANDAG

Inflation rate: The Fed has done an admirable job bringing the rate of inflation down, but it is still more than double the Fed’s target of 2 percent. Inflation will keep interest rates high, eating away at people’s livelihoods, and inevitably will have long-term detrimental effects on their standard of living. If inflation can be controlled, interest rates should fall, leading to a better business and consumer environment.

Caroline Freund, UC San Diego School of Global Policy and Strategy

The 2024 election polls and results: In addition to the presidency, all House seats and one-third of Senate seats are up for election. Polls and outcomes will reflect voters’ views on regional and national economic conditions. The winners will craft economic policies and set the country’s direction. Among other things, the election will be about how much to tax the rich and corporations, whether to maintain international trade and cooperation, and the level of support for renewables vs. fossil fuels.

Haney Hong, San Diego County Taxpayers Assoc.

New housing construction: It’s not just in San Diego but also in many other parts of the country where we aren’t building enough homes. In our neck of the woods, we’ve become the most expensive place in the U.S. to live — mostly due to housing costs that continue to push upward because we aren’t building enough homes. It would be nice to see this number increase locally and nationally.

Kelly Cunningham, San Diego Institute for Economic Research

Employment changes: While total jobs fully recovered from pandemic shutdowns, employment dynamics continue happening as some sectors thrive and others diminish. As the past year progressed, regional employment appeared to flounder. California’s significant increases of minimum wages will have unintended consequences resulting in more machine automation and marginal businesses closing, resulting in less employment among service-providing businesses. California’s ongoing attempts at micro-managing the economy will continue imposing dysfunction and disrupting productive portions of the economy while attempting to promote non-profitable sectors.

Lynn Reaser, economist

Consumer spending: Expect a slower pace of spending for many reasons. These include a lower saving rate, leveling off in wage gains, high interest rates, and less demand for some durable goods. Other downward trends are a resumption of student loan payments and higher delinquencies on sub-prime credit. These trends will be counterbalanced by healthy balance sheets and good worker income leading to continued consumer spending, albeit at a lower pace.

Phil Blair, Manpower

Employment: If everyone who wants to have a good job has one, the economy pretty much has to be doing well. People have money in their pockets to spend, and the snowballing effect of consumption is good for everyone.

Gary London, London Moeder Advisors

Vibes: There are two fundamental economic persuasions. The first is the data-driven types like inflation, recession, interest rates, monetary policy, etc. The other is “vibes.” Now, you may not think that is a thing. Yet, in the face of relatively good economic indicators going into this new year, there remain tremendous inequities, which trigger bias and confusion. When vibes match up to what is going on empirically in the economy, the world will be righted.

Alan Gin, University of San Diego

Housing prices: The high cost of housing remains the biggest problem facing the local economy. A large part of the population is priced out of the home ownership market. They are being pushed into rentals, which is driving up rents as well. This means that most San Diegans are spending a large portion of their incomes on housing, which limits their ability to do other things. Also, local businesses have difficulty attracting workers or have to pay higher wages, which drives up their costs.

Bob Rauch, R.A. Rauch & Associates

Employment: This single indicator can significantly influence the stock market as it is released just after each month. The jobs report helps forecast future activity and represents the well-being of the U.S. workforce. Wages make up the primary source of household income; the more money earned, the more consumers buy. This household spending represents more than two-thirds of U.S. economic output. The highlight of the jobs report is the unemployment number, so this is a critical report.

James Hamilton, UC San Diego

Unemployment claims: The hope at this point is that the Fed has successfully engineered a “soft landing,” bringing inflation down without causing a recession. But we still want to keep an eye on the possibility of a recession. New claims for unemployment insurance will be the best leading indicator if we do start heading into a recession.

Austin Neudecker, Weave Growth

Consumer Sentiment: I am anxious about the contrast between low customer sentiment and the surprisingly strong economic reality. Historically, these measures have been correlated but recently diverged, likely fueled by politically motivated narratives. I fear that if this disconnect continues, we are heading into a highly contentious and consequential election with substantial economic stakes and abundant uncertainty.

Predictions for year-end 2024

Welder Robert Fukushima works at A.O. Reed & Co., a construction company based in Kearny Mesa, in mid-October.

(K.C. Alfred/The San Diego Union-Tribune)

San Diego County unemployment rate

The majority of the panelists predicted that the jobless rate would be higher by the end of the year than it is right now, at 4.2 percent. Still, five of the 15 Econometer members said the jobless rate would be lower.

Ray Major: 4.5 percent
Caroline Freund: 4.5 percent
Haney Hong: 5 percent
Kelly Cunningham: 5.2 percent
Lynn Reaser: 4.8 percent
Phil Blair: 4.1 percent
Gary London: 4.4 percent
Alan Gin: 4 percent
Bob Rauch: 4.4 percent
James Hamilton: 4.4 percent
Austin Neudecker: 5.5 percent
Chris Van Gorder: 4 percent
Norm Miller: 3.8 percent
Jamie Moraga: 4.1 percent
David Ely: 4.5 percent

Almost all panelists think the county’s median home price, $850,000 in November, will be higher at the end of 2024. The highest prediction, $1 million, would mean a 17.6 percent rise, which isn’t that far off from recent history, considering the price was up 30 percent annually in March 2022.

Ray Major: $810,000
Caroline Freund: $900,000
Haney Hong: $1 million
Kelly Cunningham: $800,000
Lynn Reaser: $800,000
Phil Blair: $880,000
Gary London: $800,000
Alan Gin: $900,000
Bob Rauch: $910,000
James Hamilton: $800,000
Austin Neudecker: $900,000
Chris Van Gorder: $800,000
Norm Miller: $875,000
Jamie Moraga: $994,000
David Ely: $891,000

Dow Jones Industrial Average

The stock market ended the year on a high, at 37,689, and almost all members are optimistic the industrial average will be up considerably by the end of 2024.

Ray Major: 39,900
Caroline Freund: 38,500
Haney Hong: 38,000
Kelly Cunningham: 40,000
Lynn Reaser: 39,000
Phil Blair: 38,200
Gary London: 40,000
Alan Gin: 40,000
Bob Rauch: 38,500
James Hamilton: 37,000
Austin Neudecker: 34,000
Chris Van Gorder: 39,000
Norm Miller: 39,500
Jamie Moraga: 40,000
David Ely: 40,000

Oil prices

Unlike past years, the panel is more in agreement that oil will be more costly by the end of 2024, which ended last year at $71.65 a barrel. The answers varied wildly on just how much prices will go up, and two members suggested prices would be down.

Ray Major: $80.22
Caroline Freund: $72
Haney Hong: $100
Kelly Cunningham: $80
Lynn Reaser: $75
Phil Blair: $78
Gary London: $80
Alan Gin: $70
Bob Rauch: $83
James Hamilton: $75
Austin Neudecker: $86
Chris Van Gorder: $82
Norm Miller: $70.23
Jamie Moraga: $83
David Ely: $78

Have an idea for an EconoMeter question? Email me at phillip.molnar@sduniontribune.com. Follow me on Threads: @phillip020