SAN FRANCISCO - The Lusk Center for Real Estate and the chief economist for the California Building Industry Association (CBIA) made separate forecasts at PCBC 2007: The Premier Building Show, Thursday offering similar opinions at San Francisco's Moscone Center.
"Nationally, the basic story is uncertainty," says Raphael Bostic, interim associate director of the USC Lusk for Real Estate. "[Housing] growth is slowing down, but the stock market is at record levels. There are a lot of mixed messages."
"The West," Bostic continues, "has been and remains the leader in housing prices."
Bostic adds that typical top markets in California, Nevada, and Arizona have been surpassed by growth bursts in Utah, Wyoming, Idaho, Washington, and Oregon. Bostic predicts that there are "some clouds on the horizon" for the California housing market.
Delores Conway, director of Casden Real Estate, echoed Bostic's prediction of uncertainty in California.
Overall, the Lusk Center for Real Estate reports that home price appreciation has slowed in all major California cities. In Bakersfield and Fresno, sales are down 30 to 40 percent. In addition, apartment markets are tight; apartment occupancies are 96 percent or higher, except in Sacramento and the Inland Empire.
Alan Nevin, chief economist for the CBIA, reports that the Riverside/San Bernardino locales account for 50 percent of California's total decline in single-family permit activity in the first four months of the year. Two factors accounted for this: rapidly rising gas prices and the inability to sell new homes to first-time, move-up buyers.
"With the soft market for resales, these first-time, move-up buyers are unable to sell their [current] homes for a price that will provide them the anticipated equity to move up," Nevin states.
Nevin also weighs in on one of the hottest industry topics in 2007: subprime loans.
"The impact is nowhere near as bad as the media has played it up to be," Nevin tells reporters during his conference call. "The will to buy is still strong [in the face of subprime issues]."
Nevin concluded that the 3rd and 4th quarters will dictate what's in store for California in 2008.
"What you see happening in the second half of 2007 will be what happens in 2008," he said.