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Real estate slowdown won’t cause recession

UCLA forecast: Risk of housing crash greater than people think

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If history is any indication, the country may be heading for a housing crash, according to the Anderson Forecast, a product of the University of California, Los Angeles. "The risk of a housing crash rather than a slowdown is far greater than what most people think. In fact history is on the side of a crash," stated David Schulman, a senior economist for the UCLA Anderson Forecast, in his report, "Housing, Inflation and the Fed," released today. He added, "Every major housing cycle of the past 45 years ended with activity declines in excess of 50 percent. Because the current cycle was so powerful, why should we expect any less?" The report also notes that the blame for a real estate bubble may fall on the Federal Reserve Board. "There is some truth to the notion that the Fed created the housing bubble to prevent the deflationary forces of collapsing stock prices to take hold in the real estate economy." But now, the housing market is becoming a drag on the overall economy. "The driving ...