Even as affordability declines, California's housing market won't see a "hard crash" like in the early 1990s, said Delores Conway, director of the Casden Real Estate Economics Forecast at USC. "Most homeowners live in their homes and they're not inclined to sell even if it is a seller's market," Conway said. Conway warned that home buyers are increasingly taking on greater risk with so-called exotic loans such as interest-only loans. Conway said there is "some" risk to the economy. Even though housing is a big employment generator and the sector's strength was a big part of California's economic recovery, "we feel the economy is not so dependent on the housing market," Conway said.
