On June 22, Chapman University President Emeritus Jim Doti gave an update on his 45th Economic Forecast, sticking with his December 2022 prediction of a recession in 2023. “We’re pointing to a negative change in the third quarter and the fourth quarter, and that’s the stuff of a recession, perhaps a moderate one … certainly a slowdown of some sort,” Doti said during his presentation at Chapman’s Musco Center for the Arts. Doti said his forecast of a 1.5% change in real GDP was closer to the 2023 first-quarter change – 1.1 – than the consensus prediction of 50 other forecasts.

In December, Doti forecasted a drop in Orange County’s median home price to $933,000 by the middle of 2023. It was $983,000 in the first quarter of 2023, with Doti forecasting a drop of about 10% by the end of the year.

“Obviously that’s related to the home mortgage rate, but on the positive side we see mortgage rates dropping,” said Doti, predicting a slight decrease throughout the rest of 2023.

Housing affordability in the county has dropped, and Doti predicted a small uptick by the end of the year. “It may suggest that we’re near a trough in terms of housing price depreciation and the housing market in general,” he said.

Regarding California, Doti and Raymond Sfeir, director of the A. Gary Anderson Center for Economic Research, delved into trends like inflow and outflow of people and wage earners – particularly people making over $200,000.

“We’ve been down on California and all of the problems … but we have to come up with some balance, and there are some strengths in California, and Raymond and I have been talking about them, because there’s a lot going, obviously, for this beautiful Golden State,” Doti said.

Since what started as Doti’s Orange County economic forecast in 1977, Chapman’s annual forecast has become a nationally respected indicator known for its accuracy. Among the forecasts of 25 other agencies, Chapman’s forecast has been No. 1 in accurately predicting real gross domestic product (GDP) from 2004 to 2021, according to data Doti compiles.

Watch the Economic Forecast online at economicforecast.chapman.edu