The slowing housing market in California won’t stand in the way of the state’s economic growth, according to an economist for Comerica bank, a subsidiary of Comerica Inc., a Detroit-based financial services company.
Dana Johnson, chief economist for Comerica Bank, said, “The coming home-price adjustments will be relatively orderly – denting, but not crushing the state economy,” according to a Comerica announcement.
Johnson spoke Thursday as a featured panelist at the 2006 Economic Trends breakfast at the San Diego Marriott Mission Valley, presented by Comerica Bank and the San Diego Business Journal.
A former economist with the Federal Reserve Board, Johnson also said, “I expect California to grow at a healthy pace in 2006, closely shadowing the national growth rate of about 3 1/4 percent.” As California’s economy – which generates more than 13 percent of the national output – has grown, it more closely has come to resemble the national economy’s growth rate, with one exception: real estate, he noted.
Over the past five years, housing prices in California have risen at a 16 percent compound annual rate, but “the recent trend can’t last,” he said. “House-price gains in California are going to slow dramatically or reverse.”
He said affordable credit and a scarcity of good building sites will temper the slowdown.
Johnson also will be a featured speaker at two more Comerica-sponsored economic forecast events this month: the “Los Angeles Business Journal 2006 Economic Forecast,” on Jan. 18 in Los Angeles; and the “The Economics of Business in 2006,” co-sponsored by Comerica Bank and the Stanford Institute for Economic Policy Research, on Jan. 19 in San Mateo.
The Western Market of Comerica Bank includes 60 branch offices in California markets, including San Francisco, San Jose, Los Angeles, Orange County, San Diego, Fresno, Sacramento and Santa Cruz /Monterey, as well as in Phoenix/Scottsdale, Ariz.
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