Nov. 7--With mounting job losses, the housing market collapse and dwindling consumer spending, San Luis Obispo County's economy has not been spared the pain of one of the worst recessions in decades.

Despite these tough times, there is a glimmer of light at the end of a dark and gloomy tunnel, economists say.

"You went into the recession earlier than other areas, but you'll come out of it much earlier than other communities,'' said Brad Kemp, director of regional research for Beacon Economics.

The Los Angeles-based firm presented the county's 2010 economic outlook on Friday for the UCSB Economic Forecast Project.

The county's economy, which has experienced flat growth for the past four years, will likely see the beginning of a recovery next year, Kemp predicted, as some stimulus dollars trickle in to local projects, new retail sites such as the Paso Robles Lowe's pop up and travelers from other parts of California continue to visit the county for an affordable escape.

While the worst may be behind the county, the healing will be slow and there will be more headaches before the economy begins to grow again.

The county's unemployment rate, which is typically one of the lowest in the state, bottomed out at 3.8 percent in the fourth quarter of 2006, but has risen to 9 percent in the third quarter of this year.

Unemployment will peak in the fourth quarter of 2009 at 9.3 percent before it slowly declines through the end of 2013, according to Kemp's analysis.

'Temporary agency employment will lead the job recovery,'' Kemp said. "But that takes some time. When employers make a decision about whether to hire again, they will bring in temps first."

San Luis Obispo County has sustained a loss of just under 4,300 payroll positions since April 2007.

The most resilient sectors continue to be health services and education.

The industries with the greatest losses were construction, real estate, and finance and insurance, a result of the bursting of the housing bubble, which saw median home prices fall by more than $207,400 -- to just over $379,490 in the second quarter of this year -- from the peak in the fourth quarter of 2005, when it stood at $582,900.

Beacon economists believe that sales and prices of single-family homes here are showing signs of stabilization.

Yet, median home prices in the county are poised to drop an additional $45,000 or about 12 percent by the first quarter of 2011, making housing less expensive.