Housing Industry to Drag Until 2009?

Southern California's overall economic picture going forward looks generally positive, but the housing market is expected to limp through 2008 with only modest recovery expected by 2009, according to the mid-year economic forecast by the Los Angeles County Economic Development Corporation (LAEDC). The LAEDC is predicting a 1.4 percent spike in the number of non-farming jobs across the region through 2008, with support from the tech, health services, and leisure and hospitality industries, bolstered by steady growth in international trade.

For the housing industry, the picture isn't quite as upbeat.

"A frequently asked question is when the housing industry will turn around," said LAEDC Chief Economist Jack Kyser. "We are a tad bearish, forecasting a distressing 33.7 percent decline in the number of new housing permits in the five-county area in 2007 and a 6.8 percent slide in 2008." Continued weakness in the industry, said Kyser, will hold through late 2008, with only "restrained" recovery expected. "Don't look for a return to double digit gains in prices," he said.