The view from the IE: Recession
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No ifs, ands or buts: Chapman University’s Anderson Center in Riverside is predicting a national recession. Like, right now. Negative GDP growth in the first quarter (-1.0%) and the second quarter (-1.9%) before a rebound in the third quarter.
A major factor: The Anderson Center says consumer spending will be hit by continued declines in the amount of cash consumers are pulling out of their houses.
In the Inland Empire, the Anderson Center predicts: ‘a sharp drop in home sales ... a sharp downturn in jobs in real estate-related sectors ... the weakest rate of job creation since 1993 ... higher unemployment rates,’ plus a 12.5% decline in the median selling price of single-family homes.
Will lower interest rates help? Anderson says they will not help some borrowers facing resets on their mortgages: ‘Those borrowers who want to refinance need to obtain an appraisal for their property matching or exceeding their current mortgage. This will not be possible for those borrowers who used 100 percent loan-to-value mortgages and are faced with declining home prices.’
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