LATimes.com
From Times wire and staff reports
The quarterly UCLA Anderson Forecast — which has been bearish on housing for a couple of years — warned that the market is at risk, largely because of the breakneck pace of price gains. The report, released last week, suggests the housing building boom that has helped drive the U.S. economy is poised for a slowdown later this year, which could lead to a recession in 2006.
The UCLA report stops short of estimating when California's resale housing market might begin to see a sharp slowdown.
Meanwhile, economists from the USC Lusk Center for Real Estate see housing prices continuing upward in major markets across the United States for the rest of 2005. They advise potential buyers who are "sitting on the fence" and waiting for prices to drop to consider making their moves before the end of the year to avail themselves of tax breaks from mortgage interest and property taxes.
An indicator that the boom market may be losing steam came from an industry tracker. Two high-price counties posted single-digit percentage gains for the first time in several years while tight inventory continued to rein in sales, said DataQuick Information Systems analyst John Karevoll. But there is still no sign of a calamitous price collapse ahead, he said, and sales for the month of May were just under the record set last year.
In San Diego County, the median price — the point at which half the homes cost more and half cost less — had its first single-digit percentage gain in five years, while Orange County recorded its first in three years.