UCLA study forecasts California housing bubble
According to a new study by UCLA, California and the Nation are in a housing bubble.
Fortunately, the burst is not supposed to be harsh. In fact, the overall economic forecast is good for 2005. While construction and the economic recovery will be slowed a bit, there should be no stall.
Of course, not everyone agrees that California is in a bubble. An LATimes.com article states, "They say real estate prices today are rationally propelled by low mortgage rates and high demand, while construction is justified by population growth. In California, they note, demand continues to be strong, and building in many areas has been constrained by land limitations and regulatory hurdles."
"To have a bubble, you have to have oversupply," said Alan Nevin, chief economist for the California Building Industry Assn. "We don't have oversupply."
There is no way of predicting if, or when the bubble might burst. Southern California housing prices continue to appreciate by at least 20% a year. Still, as the supply of homes increases, home prices seem to be slowing in many areas of Southern California.
Most expect that appreciation will slow, but they don't expect any serious depreciation.
Click here for the complete LA Times article.
Click here to get pre-approved for a mortgage.
Fortunately, the burst is not supposed to be harsh. In fact, the overall economic forecast is good for 2005. While construction and the economic recovery will be slowed a bit, there should be no stall.
Of course, not everyone agrees that California is in a bubble. An LATimes.com article states, "They say real estate prices today are rationally propelled by low mortgage rates and high demand, while construction is justified by population growth. In California, they note, demand continues to be strong, and building in many areas has been constrained by land limitations and regulatory hurdles."
"To have a bubble, you have to have oversupply," said Alan Nevin, chief economist for the California Building Industry Assn. "We don't have oversupply."
There is no way of predicting if, or when the bubble might burst. Southern California housing prices continue to appreciate by at least 20% a year. Still, as the supply of homes increases, home prices seem to be slowing in many areas of Southern California.
Most expect that appreciation will slow, but they don't expect any serious depreciation.
Click here for the complete LA Times article.
Click here to get pre-approved for a mortgage.
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