California’s housing market may soon start to level off, according to real estate experts at the Milken Institute’s State of the State Conference 2005. The panelists included professor Delores Conway, director of the University of Southern California’s Casden Real Estate Economics Forecast. Conway agreed that the data compiled by the Lusk Center indicates “a soft landing” for the housing market. Increasing construction costs, which have been passed onto the homebuyer, have soared 30% in the last year, according to Conway and may cause investors to abandon projects. The panel noted that unlike the condo bust of the 1990s, in general California’s supply and demand is well balanced. Conway said the exception to this is the massive overbuilding in the Inland Empire. “We are seeing speculative development supply exceeding demand,” Conway said.
November 1, 2005