The good news is that Ventura County has preserved a great deal of its land, and can still make choices about land use, density and affordability, Maxey said. Other good news for the housing industry might come next week.
If the Federal Reserve Board cuts interest rates aggressively Tuesday, the market should regain its legs, which are a little wobbly right now, said panelist Raphael Bostic, interim associate director of the USC Lusk Center for Real Estate and associate professor in the School of Policy, Planning and Development.
Many industry analysts believe that policy will play a big role in when the market bounces back.
"Finding a way to buy time through stimulus policy might help to limit the extent of the deterioration in the market," Bostic said. "There are very strong pressures on the Fed to cut rates, which makes a rate cut very likely."
If the Fed doesn't cut rates, it will be a real hit to consumer confidence, which is trending downward and expected to decline more because of the lending industry's credit crisis, he said. That could deepen the distress for an already vulnerable economy.
The gross domestic product's growth, which for years has been fairly healthy — in the 3.5 percent to 4 percent range — has slowed to about 2 percent. This decline indicates "clouds on the horizon" and that it's going to be a challenge to maintain job growth and the standard of living, Bostic said.
Job growth has ground to a halt and is trending straight down, he said. Even as job creation has slowed, the unemployment rate has not changed much. Fewer jobs being added to the work force suggest that there aren't as many people trying to work, which speaks to the collective psyche on what people think about the economy, Bostic said.
Meanwhile, productivity growth, which has been strong and steady for years, has contracted considerably in the past year and is trending down to almost zero percent, he said.
Despite the gloom in the labor market, Bostic said the economy is in a position to grow in the long term — as long as productivity remains high.