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SB economist says housing bust bottoming out

Andrew Edwards, Staff Writer

Created: 05/21/2009 08:14:12 PM PDT

The Inland Empire real-estate market appears to be bottoming out, according to regional economist John Husing.

Home prices over the past few months appear to be stabilizing as home sales volume continues to increase, Husing said Thursday, adding that the economy will still take some time to pull completely out of the recession.

"When we start looking at construction, 2011. Maybe," Husing said.

Husing, speaking at a real-estate summit sponsored by The Sun, said his chief concern as an economist is that the region's economy will roll along the bottom rather than bouncing back quickly and vigorously.

Husing attributed the increased volume of home purchases to lower prices and greater affordability.

If there is a benefit to the bust, Husing said, it's that people can afford to buy homes because prices have returned to earth and that the market is closer to a point where developers will be able to build new homes again.

In order for that to happen, however, he noted that government agencies will need to give builders breaks on fees to keep building costs in line with what the market will bear.

He blamed the housing bubble in part on legislative impediments to construction that artificially hiked prices, which attracted speculators and led to the explosion of ill-advised mortgage products as people bought homes they couldn't afford.

He said municipalities will need to lower their development fees to allow for new

construction of modest homes.

"They've got to downsize. The big McMansions aren't going to be built until we get to a different phase," Husing said.

Despite such bad news, Husing said he figures that the residential real-estate market has bottomed out.

In giving his economic overview, Husing pointed out that the region remains mired in the worst recession in decades, citing statistics showing the Inland Empire has lost more than 340,000 jobs this year.

Among American metropolitan areas with more than 1 million people, the Inland Empire's unemployment rate of 11.8 percent is second only to Detroit's rate of 11.9 percent.

Building-permit valuations dropped from $12.5 billion in 2005 to $3.9 billion in 2008. Husing said that means an equivalent amount of money has been lost in retail and other industries that serve those who made their living in construction-related work.

Happy Father's day to all you dads out there. I attended The Vine Church this Sunday with my dad, brother who is a dad, my girl friend, and the rest of my family. Pastor Jeff Evans gave an awesome sermon and i wanted to share it with everybody.

Take some time and listen to the message and i guarantee you will learn something or at least gain a little inspiration and motivation to become a better person.

http://www.thevinerc.com/downloads/SS_06_21_09.mp3