Bearish Forecast From Former Bruin: Thornberg Sees 20% Decline in Prices

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Former UCLA economist Christopher Thornberg’s new forecast for California real estate is on the grim side. Highlights:
--Real estate prices will fall at a 5% rate in California for the next four years.
--Excess inventories of new homes and rising foreclosures will drive prices lower.
--There is a chance of a recession by the end of the year based on the impact that the housing market will have on consumer spending.
-- 2007 will be the worst year for residential building permits since the mid nineties, and level out in 2008. Recovery in construction will begin again in 2009.
--State employment growth will slow to almost zero next year -- 0.4%, and population growth will slow as well.

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