Inman News reports on the latest UCLA forecast. "The housing market will not crash unless the job market weakens significantly, though home prices are expected to stagnate for at least five years during this down cycle, according to the latest Anderson Forecast."

"The forecast calls for the market prices of homes to hold steady over the next five years, which equates to a drop of about 15 percent to 20 percent in real terms because of projected inflation."

"It could take 6.3 years to 16.5 years to work off excess home-price appreciation in California, the report suggests. 'In other words, these problems are likely to be with us for a long time,' forecast director Edward Leamer states in the report."

"Already, home prices have dipped in some markets. 'There are some cities and some states that have experienced slight price declines so far this year, but we are very far from a Great Comeuppance in which the extraordinary appreciation of the last five years is taken away,' the report states."

The Union Tribune. "The California real estate market will remain sluggish through at least 2008 and spark widespread layoffs among construction and financial firms, according to the latest UCLA Anderson Forecast."

"'Real estate-related employment has moved from a major engine of growth in 2005 to a drag on growth in 2006,' UCLA economist Ryan Ratcliff wrote. Ratcliff predicts that nearly 100,000 construction workers will lose their jobs over the next 2½ years."

"'A 100,000-job loss would be the outer limit of what I expect. It's unlikely but not impossible,' said Kenneth Simonson, chief economist with the Associated General Contractors of America."

"'San Diego gets all the bad press, but Sacramento is the story that nobody knows about,' Ratcliff said. 'Sacramento has gotten the most pummeled over the last year.'"

"Michael Pento, a strategist foran investment firm in Huntington Beach, said a slowdown in construction is needed, since the creation of new houses has outstripped population growth nationwide. 'It will take years to work out all the excess supply of homes, especially since home builders are still adding fuel to the fire,' Pento said."

"'For the real estate market to recover, you have to wait for incomes to catch up with the home prices, and growth in income has been negative after adjusting for inflation,' he said."

"'Housing contribution to GDP (the gross domestic product) will be very weak, with building and finance and real estate commissions suffering significant declines,' Leamer said."

"Leamer cautioned that the outlook was based on data trumped by recent reports showing that housing sales and starts were sliding more rapidly than the group had projected. If the trend accelerates, he said, 'then our forecast is too optimistic.' Leamer said, 'the unhappy home builder is not going to have anything to do.'"

"'Since builders are much more willing to lower home prices than owners, the handful of areas where new homes account for an above-average share of total sales activity could see some price declines,' Ratcliff said."

"In recent months, local real estate brokers and agents have bemoaned the negative effects on the existing-home market because of some new-home price cuts and especially, incentives of up to $100,000 per home to lure buyers."

"Building permits issued for single-family homes in California dropped 41.8 percent in August compared to August 2005, the California Building Industry Association reported today."

"CBIA chief economist Alan Nevin said that new-home construction in California is expected to continue to cool for the remainder of the year. Builders will continue to reduce their standing inventory of unsold homes that are under construction or completed, he said, and are now using aggressive marketing techniques to reduce their inventory."

"Layne Marceau, 2006 CBIA chairman, said affordability is a major problem in the state. 'For far too many California families, home prices today are simply not affordable, and even if the real estate naysayers' predictions of a drastic market correction came true, housing would still be unaffordable for most first-time buyers,' he said."