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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.
Top Real Estate Stories 4/25/05
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