Calif. Housing Market Projected To Stave Off Double-Dip Recession
WESTWOOD (CBS) — Sluggish job growth and high unemployment are expected to mark California's slow but steady economic recovery through 2014, according to two separate forecasts released Wednesday.
KNX 1070's Pete Demetriou reports projected gains in the housing market have curbed economists' fears of a double-dip recession — at least for now.
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Surveys from both the UCLA Anderson School of Business and Beacon Economics also project California job growth in the 1.4 to 1.8 percent range for the next two years, with the unemployment rate unlikely to fall below 8 percent until 2015.
However, housing starts — specifically in residential construction — were expected "to take off in earnest in 2013", when construction permits will jump by about 40 percent before soaring dramatically in 2014 to reach 130,000 permits, double the national rate, according to the report.
But while some national indicators seem to suggest a turn-around is near, neither reports gives any reason for immediate optimism in California.
Christopher Thornburg, founding partner for Beacon, said any hopes for reaching some semblance of normalcy in the economy would only put us back to conditions that existed in 2007.
"We were running a 6 percent trade deficit, consumers weren't spending, asset prices were inflated far beyond any reasonable level," said Thornburg.
Housing starts in the state will likely remain at about one-quarter of the national rate for the balance of the year, with much of the activity being in multi-family housing markets, according to UCLA Anderson Forecast Senior Economist Jerry Nickelsburg.
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