Friday, December 7, 2007

Chapman Economists Predict OC Recession in 08 and 8% Loss in Home Prices in 08

The OC, normally a solid job engine, is headed for a recession in 2008, according to economists at Chapman University. Chapman economists Esmael Adibi and Jim Doti have been predicting job growth in Orange County for 30 years. They say job numbers will turn negative starting in the second quarter of 2008 and stay negative in the third quarter. That qualifies as a recession, according to Chapman’s definition. “There is little doubt that the economy is hurting from the demise of real-estate related activity,” the economists write. “It is clear that construction and financial activities are the weakest sectors of the economy followed by trade, transportation and utilities which are indirectly affected by the housing market.”
Most importantly, they also foresee an 8.1 percent drop in the median price of a resale single-family home in 2008. Applied to a Laguna Beach home bought today for $2,000,000, that would mean a $160,000 loss in one year. Scary for homes in Laguna Beach.

You can view the story here.

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