NO RECESSION ON THE HORIZON ANDERSON FORECAST STILL SEES SOFT LANDING FOR REAL ESTATE.Byline: GREGORY J. WILCOX Staff Writer California's housing market slowdown is rippling through the economy but the likelihood of recession-size job losses over the next two years remains small, said the UCLA UCLA University of California at Los Angeles UCLA University Center for Learning Assistance (Illinois State University) UCLA University of Carrollton, TX and Lower Addison, TX Anderson Forecast that will be released today. The forecast's economists also still maintain that the latest residential real estate boom market will cycle into a soft landing rather than a crash like the one in the early 1990s. ``We're going to see real estate-related employment slow down,'' said Ryan Ratcliff, who wrote the California report. He concludes that the state's economy is at a tipping point The point in time in which a technology, procedure, service or philosophy has reached critical mass and becomes mainstream. See network effect. See also tip and ring. but there will be positive job growth over the next several years. The forecast's ``buzz word buzz word Noun Informal a word, originally from a particular jargon, which becomes a popular vogue word buzz word n → palabra que está de moda is sluggish but no recession. That forecast is then what leads into the soft landing in real estate,'' he said. Ratcliff does not see a recession on the horizon nor a decline in home prices. Ratcliff cites two reasons for the latter. Historically, sustained declines in home prices are ``extremely'' rare and occur only during recessions and in hard-hit places such as California during the early 1990s. He notes that since 1975 there have been only two periods of negative price movement. The first a one-quarter dip in 1982 and the second the prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. slump in the 1990s. Both came during recession. Over the next two years, recession-driven job losses are not anticipated although the real-estate sector could see some contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction . ``It seems unlikely that California would experience the 10-25 percent drop in nominal home prices that some observers have predicted without a major 1990s-sized recession,'' Ratcliff said. However, while some markets could see prices slightly lower than a year ago for a period five years forward, prices are not likely to be lower than today, the report said. However, the huge appreciation gains of the past few years are history. For example, UCLA's forecast came a day after real estate information provider DataQuick Information Systems reported that the median price of a Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, home increased an annual 6.4 percent in May. That is the smallest gain since a 6.2 percent increase in July 2000. The biggest difference between this forecast and the last one is that the slowdown that was expected in this quarter is being pushed back to the next quarter. UCLA anticipates that California will have nonfarm employment growth this year of 1.8 percent and 1.2 percent the next two years. That compares with a national rate of 1.5 percent this year, 1.1 percent next year and 1.3 percent in 2008. Reflecting the real-estate slowdown, construction employment should grow by 4 percent this year then fall 3.1 percent next year and 5.2 percent in 2008. Ratcliff said construction employment has hit a plateau plateau, elevated, level or nearly level portion of the earth's surface, larger in summit area than a mountain and bounded on at least one side by steep slopes, occurring on land or in oceans. in Southern California and the Bay Area while the Central Valley has lost about 3,000 sector jobs. The strongest sector in the UCLA forecast is professional and business services, with employment increasing 3.1 percent this year, and 2.2 percent each of the next two years. Jack Kyser, chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the at the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. County Economic Development Corp., agrees with UCLA's assessment. ``Definitely the boom is over,'' Kyser said of the housing market. ``As you drive around you see more price-reduced stickers.'' The Los Angeles area should also fare better construction-wise in the coming months because of some mass transit mass transit, public transportation systems designed to move large numbers of passengers. Types and Advantages Mass transit refers to municipal or regional public shared transportation, such as buses, streetcars, and ferries, open to all on a and commercial building projects that are under way or about to start. ``The good news is other industries of the state are chugging right along. There is no drastic results from the slowdown in the housing market,'' Kyser said. |
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