Industry News

Real estate market is like a ‘balloon,’ says economist

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The California housing market is cooling and will not experience a meltdown, according to an analysis prepared by a Union Bank of California economist. The forecast, "Housing Market: A Slowdown, Not a Meltdown," which is based on data from the California Association of Realtors trade group and the Office of Federal Housing Enterprise Oversight, concludes that "the housing market is headed for a soft landing." Keitaro Matsuda, senior economist for Union Bank of California, states in the analysis, "While the California housing market retains much momentum, especially in inland communities, there are signs that the boom has already peaked." The unsold inventory of single-family detached homes in the state grew from November 2004 to November 2005, for example, and price appreciation has slowed. While appreciation rates in some cases have slowed in 2005 compared to 2004 for many communities in California, Matsuda noted that "some California markets have experienced extraordinary price app...