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Speed of price correction is 'almost unprecedented'; USC economists present some bad news, some better news

June 27, 2008

...The bad news: It's "almost unprecedented" that home prices are falling "this swiftly and this steeply in this short period of time" in some California market areas. That's according to Delores A. Conway, director of the Casden Real Estate Economics Forecast at the University of Southern California Lusk Center for Real Estate, who spoke Thursday during an economic and housing forecast presentation at PCBC, an annual builders' conference...

... Raphael Bostic, director of the Master of Real Estate Development Program at the USC Lusk Center, said that lending activity in some market segments in California "shut down here much more dramatically" than in some other U.S. markets because of the comparatively high cost of homes in the state. And while there are several legislative and regulatory efforts to expedite the market's recovery, "Until banks and (others) decide to participate in a significant way -- there is very little that anyone can do about it. It's got to be lender to lender."...

... Richard Green, director for the USC Lusk Center, said some lenders have severely pulled back on jumbo lending. "What they're saying is we're closed for business" for high-value loan amounts, he said...