Posted on 09/27/2005 9:26:30 PM PDT by BurbankKarl
California's housing boom appears to be peaking, and the resultant slowdown is expected to produce "weak growth" in the state's economy during the next two years and a possible recession by the end of 2007.
That's the view of economists at UCLA Anderson Forecast, which plans to release its widely watched quarterly outlook this morning.
"There are some signs that the housing party is ending," said Christopher Thornberg, senior economist at the University of California, Los Angeles group and author of its California forecast.
Thornberg points to an almost doubling of homes on the market in the past six months, a flattening of sales activity and the widening use of high-risk mortgages that buyers are using to acquire today's pricey homes. Property in California, he said, is now overvalued between 40 percent and 45 percent.
"The forecast for California is mediocre at best, at worst we are liable to dip into another recession," Thornberg said, putting the odds of a recession by the end of 2007 "at least 50 percent if not more."
The latest UCLA outlook is slightly more downbeat than its previous report in June "because I think we're at the peak" of housing, Thornberg said. UCLA economists have long warned that a decline was coming and could end badly, but this is their strongest suggestion yet that the top may finally be at hand.
Although UCLA forecasters have consistently been more pessimistic about the housing boom and California economy than many other analysts, their views are notable because they were among the first economists to predict the 2001 recession and to identify the current housing boom as a bubble.
(Excerpt) Read more at latimes.com ...
With house prices where they are, the new California status symbol isn't owning a masnion in Bel Aire, or even a decent tract home in Studio City-- but having your single family occupying any home anywhere in L.A. county.
I KNOW I can still get 500,000 for my one-seat outhouse in Pacoima.......: )
why sell it...it will DOUBLE in six months....You can take it to the bank!
R O T F L M A O
" Owner will carry paper".....................TOILET paper that is : )
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