Economists Predict More Pain Ahead But No Recession

Los Angeles Times (06/18/08); Vincent, Roger
The faltering housing market will continue to put pressure on the nation's economy in the months to come, but researchers at UCLA say a recession is unlikely to occur. Although many workers have been able to hold onto their jobs, homeowners have been increasingly willing to sell houses at a loss that are no longer worth as much as what is owed lenders, says economist Edward Leamer, director of the quarterly UCLA Anderson Forecast. The economy is expected to see little or no growth through 2009, distressed home sales will continue and market analysts will focus more on home prices as foreclosures decline. "The unprecedented speed of the price adjustment means that instead of several years of slow bleeding [like the 1990s] we have compressed the necessary adjustment into two years of intense housing pain," writes UCLA economist Ryan Ratcliff.