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Economists mixed on California’s outlook

USC Lusk Center director '70% optimistic'

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SAN JOSE, Calif. -- Drastic cutbacks in new-home construction have helped reduce inventories of homes for sale in California faster than expected, and falling home prices and low interest rates are making owning look like a better deal than renting for many, according to Richard Green, director of the Lusk Center for Real Estate at the University of Southern California.That, coupled with the fact that home prices have fallen below replacement cost in many markets, means that "if you know you are going to live in a place for at least five years, it's just silly" not to consider making the move from renting to homeownership, Green told Realtors meeting in San Jose Thursday.Green said those three factors -- shrinking inventories, better rent-to-price ratios, and price relative to replacement cost -- help explain why he was the lone optimist on a panel of three economists presenting their outlooks for 2010 at the California Realtor Expo. Green recognized an equal number of potent...