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Real estate boom to bust

Housing market could drag economy down

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The bottom is likely to drop out of the national housing boom within the next couple of years, and this downturn will probably be accompanied by an economic recession, according to a University of California, Los Angeles, forecast. "Absent something of the magnitude of the Vietnam War, we should expect a housing collapse and an attendant recession. Probably late 2005 or 2006, though it is impossible to say when right now," said Edward E. Leamer, director of the UCLA Anderson Forecast. "We are building up the same kind of mountain of home spending that eventually crashed into the valleys of eight recessions." If the downturn doesn't occur by the end of 2006, it will probably happen before the end of the decade, Leamer states in the national forecast report. "Now, when the weather is great, is the time to prepare for the storms coming later," he states. The report, titled, "Normal, again," notes that since World War II there "has only been one decline in the ratio of spending on homes t...