California's housing market is overvalued by 10 percent to 20 percent, said Mark Zandi, chief economist and co-founder of Economy.com, at a conference MondayZandi sees a soft landing as more probable then a hard landing. A hard landing for California's housing market is pretty much inevitable because it has been a speculative episode. However, Mark Zandi is correct in noting the importance of the housing market for California's economy.
Housing prices could take a sharp drop if interest rates rise quickly enough. Another possibility is that home prices would flatten "for an extended period of time," Zandi said.
A flattening out of prices, connected with a gradual rise in interest rates, is the most likely scenario, Zandi said.
"I do think we will see the market correct," Zandi said.
"California's economy -- its success and failure -- is intimately tied to the housing market," Zandi said.
Wednesday, November 02, 2005
Mark Zandi On the California's Housing Market
Mark Zandi, chief economist of Economy.com laid out two possible scenarios for California's housing market. From DailyBreeze.com, November 1st:
Posted by David at 12:36 AM