Getting Graphic is a semi-sort-of-irregular collection of our favorite BIG real estate-related chart(s).
The UCLA Anderson Forecast, which painted a real doom and gloom projection for California last year which did not happen (yet), has now released its current projections for the economy.
They were among the first economics group last year to declare the housing market in a bubble have changed their position to say that housing won’t decline significantly anytime soon [LA Times].
In its widely watched quarterly outlook to be released today, the UCLA Anderson Forecast reiterates earlier projections that the deteriorating housing sector will slow state and national economic output and job growth through 2008. Although it doesn’t rule out a recession, it doesn’t expect one.
Absent a recession, it reasons, homeowners would rather hold than sell into a deteriorating market. Unless a job loss forces a sale, many homeowners would rather stay put than sell for less than the high they recall some neighbor getting last year.
“Expect home prices five years from now to be about the same as they are today, though lower in real [inflation-adjusted] terms by 15%-20%,” the forecast said.
Based on the fact that the west coast has the highest housing prices, the highest loan to value ratios (biggest mortgages), this is quite surprising and perhaps infers more optomistic (less pessimistic) outlooks for other regions of the country.
Basically the reports say that a decline in housing will be obtained through stable prices that are adjusted for inflation, not a crash.
Housing starts are projected to drop 30% next year. UCLA says its going to be homebuilders, not home owners [SDJ], that are going to be hurt.
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