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| Edward Leamer |
There? no way around it: More pain, job loss and housing devaluation are coming before we?e out of this recession. But there are signs that the worst may be behind us.
That? the gist of a May 15 presentation at the San Diego Marriott Hotel & Marina from three economists with the UCLA Anderson Forecast, which provides reports on the national, state and regional economies.
Though the pace of the declines has abated in recent months, the national gross domestic product is still contracting and won? turn around until the latter part of the year, said Edward Leamer, director of the forecast.
Leamer and his colleagues said how long the recession lasts depends a lot on how soon consumers resume spending. ?e knew there would be consumer cutbacks, but we didn? realize that consumers would do their cutbacks all at the same time,?Leamer said about last year? decline.
In the first quarter, consumers were apparently more willing to spend, yet even if this trend continues, 2010 will still be a year of slow growth, and the national GDP will grow 3 percent in 2011, according to the report.
The outlook for California? and San Diego? economies hinges greatly on the depressed housing market, which is ready for a turnaround later this year, said Jerry Nickelsburg, a senior economist with the Anderson Forecast.
?he housing downturn in California is running out of steam,?Nickelsburg said. ?t? ready to turn.?p>Historic Lows
As the inventory of unsold houses keeps shrinking, and new residential construction remains at historic lows, it won? be too much longer that demand begins to outstrip supply, the Anderson economists said.
?ousing should recover because it? ready to recover,?said Mark Schniepp, a director with Anderson.
San Diego? existing housing sales has been climbing in recent months, and, for March, passed 2,500, its highest level since mid-2005. Home prices are also still declining, but not at the same rate. For March, the median was $323,000, down 27 percent from March 2008.
Foreclosures have also declined and prices are nearing a bottom as the pool of potential buyers gets larger.
?e know there? a lot of sideline buyers out there and a lot of money waiting to buy houses,?Schniepp said. ?he time to get a deal was a few months ago or right now.?p>Thwarting the stabilization of the housing market is a big surge in notices of default sent to delinquent mortgage borrowers in the first quarter. Economists downplayed the higher number of default notices, which were caused by a backlog created when lenders held off from starting the foreclosure process until they could review the federal government? loan modification rules.
The defaults should continue, though not at the same rate, and foreclosures will likely go up and down for the remainder of the year. However, if the banks can? modify many of the creative mortgages made in recent years, that could continue to push down housing values, the economists said.
