The result: the talk of price swoons and the housing “bubble” bursting has gotten quieter – at least for now. “The indicators we are seeing are consistent with a soft landing,” said Delores Conway, director of the Casden Real Estate Economics Forecast at the USC Lusk Center for Real Estate. “The market is stabilizing to some degree. But we still need more time.” Appleton-Young said that since 1988, the average unsold inventory level for homes in the county is 6.9 months. White said that the current county home market is balanced, though it is hard to recognize that after the price gains the region experienced from 2003 to 2005. “Last year was just complete insanity in many ways, so it was difficult to use 2005 as a benchmark or 2004 or 2003 for that matter,” White said. “Those years were so far away from normal.” Bob Edelstein, professor of business administration at the University of California Berkeley Haas School of Business, said that while it is not clear whether the market has “found its level” he does not anticipate a regional recession, which would severely impact the housing market. “The business sector is fairly healthy,” Conway said. “If that changes we could see more of a bumpy landing.” Conway said that seasonal factors will likely lead to a further decrease in the number of transactions during the late fall and winter months. This sort of seasonal reduction in volume is an annual occurrence for the housing market. Conway said that in the summer months, families relocate and prepare for the school year, generally making that period a strong time for the market. “Typically we have a decline from August to December,” Appleton-Young said. “I would expect that pattern to hold.” Despite this expected decline, many real estate professionals said the market appears to be functioning normally. “There is nothing in the Southern California economy that will portend doom,” White said.
October 9, 2006