RECESSION-FREE THROUGH 2008.

Byline: GREGORY J. WILCOX Staff Writer

UCLA economists predict California will remain recession-free through 2008 -- reassuring news for homeowners since housing prices are expected to flatten rather than decline, according to the university's Anderson Forecast being released today.

``In case you have been on Mars and missed the news, here it is: The housing market ain't what it used to be,'' forecast director Edward Leamer wrote in his assessment.

``But we are very far from a great comeuppance in which the extraordinary appreciation of the last five years is taken away.''

The forecast, similar in tone to June's, calls for modest job growth in California and the nation through 2008. That will cushion the housing sales slide and preserve much of the 150 percent increase in Los Angeles County home prices between 1999 and 2005, noted forecast economist Ryan Ratcliff.

Homeowners could lose a little real value to inflation during the forecast period, but it won't be an economic body blow to most.

Prices could remain flat for five or six years.

``That's how these things have worked themselves out in the past,'' Ratcliff said of prior housing market cycles.

Forecasters also note that this is a volume cycle, with sales off 30 to 50 percent from their peak, rather than a price cycle.

Prices did collapse after the last bull housing market ended in the early 1990s, but that cycle was driven by massive job losses. And University of California, Los Angeles, economists agree that it would take a recession to drive down prices.

Sellers will certainly notice the market changes, though, with sales taking much longer than in the past.

This might not be a big deal, though, because sellers will realize they don't need to trade a lower price for a quicker sale unless they are in an economic pinch, Ratcliff said.

John Karevoll, an analyst at market tracker DataQuick Information Systems, agrees with UCLA's housing market outlook.

Karevoll said that it takes more pressure, like job losses, to push prices down than push them up.

Any extended economic downturn would impact housing much more than other parts of the economy.

``Housing is stretched right now. (But) it's not going to snap.''

The sales declines look big because they are coming off a peak and retreating to average levels, he said.

Economists believe that sales counts in California will probably return to 1999 or 2000 levels. That's the point at which the boom market began.

``It's not going to be a pleasant experience to sell a home,'' Leamer said of the evolving real estate market. ``The most important advice I would give to current homeowners is to stop reading the real estate pages because the news is going to seem real bad.''

The California forecast, also similar to June's, anticipates a decline in building permits to about 133,100 units in 2008 with activity then returning to the 2000 level of about 148,900 units annually.

As builders retreat, the report said, the construction sector will lose about 100,000 jobs over the next two years. Slowing home sales will also erode real estate-related employment in the financial services sector, but this will be offset by gains in leisure and hospitality sectors.

``Real estate sectors will continue to decline, but without significant declines in another sector, the net result will be a slowdown, not a recession,'' Ratcliff said.

greg.wilcox(at)dailynews.com

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CAPTION(S):

photo, chart

Photo:

(color) - Edward Leamer, director of UCLA's Anderson Forecast

Chart:

Slow growth

Source: UCLA Anderson Forecast

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