Three prominent California economists painted a rocky road ahead for the California housing market. Speaking at the California Association of Realtors convention in Long Beach, Calif., Nancy Dayton Sidhu, Stuart Gabriel and Richard K. Green said the nation and California are in a recession that could last until the end of 2009.
We have a very severe credit crunch going on, said Sidhu, vice president and senior economist at the Kyser Center for Economic Research. About 85 percent of banks have tightened their lending standards. This is an issue. That s where the problems are in the economy.
Sidhu forecasted that the recession would last through 2009, followed by a moderate recovery thereafter and economic expansion by 2010 or 2011.
Gabriel, a professor of finance and director of the Richard S. Ziman Center for Real Estate at UCLA, predicted that we re not going to have a Great Depression, but we are going to have a recession. The labor market will contract, causing consumer spending to contract.
Gabriel predicted that California will be the first to emerge from the economic downturn. California will see the up turn in housing before any other state, Gabriel said.
The federal government s rescue efforts could ease the financial markets, making it easier for borrowers to find loans, according to Richard K. Green, director of the Lusk Center for Real Estate Development at the University of Southern California.
Banks don t trust each other right now, said Green. They just don t know what s on their balance sheets. But I m still very bullish on California. I m far more optimistic this week than last week.
Will the housing sector lead the nation and California out of the recession? What are your thoughts?
foreclosure homes
The prognosis for the U.S. economy is not too rosy these days, so it comes as no surprise that some people are taking matters into their own hands and literally going to the extreme when faced with a foreclosure scenario….(read more)
foreclosure homes