Finally, a little public recognition of the North County/s growing economic influence on the region.

That was the message from this year/s UCSB Economic Forecast, delivered in Santa Barbara Thursday.

The project/s economists said that, overall, the state and region/s economies are strong, and are likely to stay strong for the near future.

But the Forecast Project/s 2006 report was not without a few red flags.

There is, for example, the continuing 7 and growing 7 disparity between the haves and have nots. Folks living in the southern part of Santa Barbara County are older and wealthier than their northern neighbors. That gap is expected to continue widening, in large part because of the vast difference in housing costs.

Another warning sign is that more people left the county in 2005 than moved into it. There isn/t a complete demographic breakdown of the flux, but it/s fairly safe to assume that many of those choosing to leave did so because of housing costs that do not favor a prosperous 7 or even marginal 7 existence for those in the working middle class.

Still, more affordable housing and a business-friendly attitude help make the North County an increasingly favorite target for new businesses, many with higher-paying jobs that could prove favorable for expansion of the North County/s middle class.

The Forecast Project report said the North County economy will most likely show strong growth in the next two years, while the South Coast/s overall economy is likely to weaken. That picture adds to this part of the county/s attraction to new businesses.

There are several unknowns, as one might expect from any situation in which economists attempt to guess which way the economy will turn.

Fuel costs and the wars in Iraq and Afghanistan will almost certainly provide steering currents for the national economy, to which the state and local economies are inextricably tied.

And then there is the uncertainty surrounding the national, state and local housing markets.

Locally, the folks at the Forecast Project predict the housing market will remain firm, a distinct departure from recent years, when the market could only be described as meteoric.

The report shows a very slight movement away from a seller/s market, to one perhaps a little friendlier to buyers 7 but not much friendlier.

Median home prices for March tumbled significantly from February figures.

Here in the North County, for example, the median-priced home in March was ,461,700, which is down more than ,18,000 from February.

Countywide, the dip was even more pronounced 7 the March median was ,750,000, down ,37,500 from the previous month.

Experts warn not to put much stock in month-to-month fluctuations. To prove that point, they remind us that the median price countywide was still 22.4 percent higher from March 2005 to March 2006. So the housing bubble clearly has not burst.

While that reality may elate homeowners, it poses a significant barrier to working families hoping to participate in the home-owning part of the American dream.

The county/s single-digit housing affordability rate is troubling for an economy on the rise 7 as it is in the North County 7 and a factor that could spell trouble in the near future.

So, while the economic outlook is fairly rosy, especially here in the North County, the road into the future is not without twists and turns. Local governments could straighten out some of those turns by working harder to accommodate our communities/ needs for affordable housing.

That/s the 800-pound gorilla hiding in the closet.

April 28, 2006