March 24th, 2010 10:30 AM by Lehel S.
California's housing market may be headed for a slight recovery - but it's not going to happen quickly, according to one industy expert.
Michael Carney, a professor of finance and real estate at Cal Poly Pomona, said Thursday that Southern California home sales and prices may be stabilizing, but "I don't think it's going to continue. If it does continue, I think it's going to be very slow."
"If you want to be optimistic, existing home sales are up 12 percent from last year, maybe more, according to DataQuick data," he said at last week's fourth quarter meeting of the Real Estate Research Council of Southern California.
The meeting's featured speaker, John Silvia, has the same expectation.
Silvia, considered one of the top 10 forecasters in the country - so named by Bloomberg - is the managing director and chief economist at Wells Fargo and Co.
"In California, you've got to look at the composition of the labor force," he said. "It's heavily weighted in construction. It's not surprising the unemployment rate is as high as it and that it's not turning around."
He predicts unemployment in this area will stay above 9 percent through 2010 at least.
"The declines in construction are behind us, but recovery will not be quick," he said.
His presentation indicated that California's housing recovery is "subpar compared to prior cycles" and that improvement is relative.
"The degree of decline is decreasing," Silvia said. "You're still losing money, but you're losing it at a much slower pace."
He doesn't think last quarter's increase in value and activity refutes that. He says there's no doubt that those improvements were biased by government incentives and other factors, and we'll be back at 1 percent increases when those influences end.
"In my opinion, if there is a change, I think it's going to get worse," said Carney.
His forecast for 2010 is not cheery.
"I certainly don't see any huge recovery," he said. "The financing is not coming back. A lot of foreclosures are in the wings. If unemployment stays the same, surely we'll see more defaults and foreclosures."