Many in the housing industry take issue with the bubble scenario. They
say prices are justified because they are being driven upward by
insufficient housing supplies coupled with growing demand from
immigrants and others. Although home price rises now are slowing, the
consequences won't be dire, they say.
==================================================================
Won't have to worry about it either once they start eminent domain
abuse and socio-economic re-engineering policies. Housing boom will
continue. It will be macro-economic forces that will be the recession
trigger ending the housing boom.
When it goes, one step closer to civil war. ***** you.
Pup-bup, pup-bup, pup-bub.
!
<^!^^,
! /
! !
F*CK THE WH*RE OF B*BYL*N
==================================================================
Advice to Readers
California was saved from the dot com collapse only by the real estate
bubble. When this goes, hundreds of thousands of illegal aliens are
going to be put out of work. We advise those who can to sell and get
out of Southern California while there is still time.
(And before motherfuckers go broke after they lose their jobs and can't
pay off the mortgages for their speculative homes and will be desparate
enough to sell them at prices lower than the intial loans they made for
them. -my comment)
http://americanpatrol.com/
===================================================================
UCLA Economists Still See a Bubble in Housing Market
By Annette Haddad, Times Staff Writer
California's economy has long benefited from the surging housing
market, while economists at UCLA Anderson Forecast have long warned
that the wave will eventually break.
In their latest quarterly forecast, to be released today, the UCLA
forecasters once again predict that a housing slowdown could push
California into recession, while causing a noticeable slowing in U.S.
economic growth
The state's economy has been boosted artificially by increased spending
from Californians feeling wealthier thanks to home price rises of 40%
in the last two years, the UCLA forecasters said. When those prices
stop rising, consumers will rein in spending, possibly triggering a
recession, they said.
And it won't even take home prices to fall, just to flatten out, they
said.
"This process will have a detrimental impact on the economy even if
prices don't fall," UCLA senior economist Christopher Thornberg said.
UCLA economists, among the first to predict the 2001 recession, began
to call the housing boom a "bubble" two years ago. That view wasn't
widely shared then.
But lately the bubble belief has gained traction. Federal Reserve
Chairman Alan Greenspan earlier this month cited signs of "froth in
some local housing markets."
On Monday, Merrill Lynch added to the bubble concerns, releasing a
report that said U.S. economic growth could slow by a full percentage
point next year if home prices were to stagnate in the biggest cities.
Merrill Lynch senior economists found that six California markets -
San Diego, Inland Empire, Los Angeles, San Francisco, San Jose and
Sacramento - were "well in bubble territory" with above-normal ratios
of home prices to household incomes.
Federal Deposit Insurance Corp. data, provided to The Times on Monday,
further underscored such concerns that declines in the nation's biggest
housing markets could throttle the entire U.S. economy.
The top 55 U.S. housing markets, where prices have appreciated 30% or
more in the last three years, represented about 40% of the total value
of all U.S. housing in 2004, FDIC spokesman David Barr said. The Los
Angeles-Orange County market alone was valued at more than $1 trillion,
as was the New York City metropolitan area.
Many in the housing industry take issue with the bubble scenario. They
say prices are justified because they are being driven upward by
insufficient housing supplies coupled with growing demand from
immigrants and others. Although home price rises now are slowing, the
consequences won't be dire, they say.
But to the UCLA economists, the sizzling housing market has masked a
number of weaknesses in California's economy, including job growth that
is not as good as it looks. Employment and personal incomes in
California have gained only modestly in the last year, UCLA's Thornberg
said. Yet, many Californians "feel" wealthier because they perceive
their homes to be worth a lot more.
Indeed, the gross value of all residential real estate in California
more than doubled, to $4 trillion, since 1997.
"Your average Californian adult found him or herself richer to the tune
of $40,000 on the basis of housing appreciation over the past two
years," Thornberg said. The amount was about half of what the same
adult earned in income in the same period.
This housing wealth effect has prompted consumers to spend more,
Thornberg said. Taxable sales in California have grown faster than
incomes for 10 quarters, he said.
But, "at some point, that will go away," he said. And when people rein
in spending, national and local economies will feel the pinch, he said.
.
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