LAT: California, U.S. in a Housing "Bubble," UCLA Forecast Says [View All]

[DeepModem Mom]

California, U.S. in a Housing 'Bubble,' UCLA Forecast Says

Building will slow in '05, hurting the nation's recovery but the state's not as much, an analysis says. Housing industry experts disagree.

By Bill Sing, Times Staff Writer


Economists at UCLA have invoked the B-word again.

In an outlook to be formally released today, forecasters say California and the nation are beset by a housing "bubble" that will depress construction next year, slowing the nation's economic recovery....

***

Although UCLA economists have raised the specter of a housing bubble in previous reports, they are now identifying it as the biggest risk to the U.S. economy.

"The housing sector's high and unusual contribution" to economic growth "is not going to continue in 2005," said Edward Leamer, director of the forecasting group and author of its national outlook.

The less-than-upbeat analysis is sure to raise plenty of eyebrows because the UCLA group was among the first to foresee the 2001 recession as well as slower growth earlier this year.

For all that, though, many experts inside and outside the housing industry reject the notion that there's a bubble waiting to pop....


http://www.latimes.com/business/la-fi-uclaecon8dec08,0,158730.story?coll=la-home-business