California 2009 Economic and Housing Forecast: Examining 5 Areas Showing California will have a Tougher Economic Year than 2008.
I won’t sugarcoat it for you. 2009 will be a much more difficult year for California than 2008. I am astonished that many pundits are now claiming how 2009 will be an up year for the markets even though the Dow Jones Industrial Average just faced a pounding unseen since 1931, during the Great Depression. They’ll point to examples like 1907 when the market fell 37 percent only to rebound by 46 percent in 1908. This is absurd since 1907 was much more isolated in terms of global reach and J.P. Morgan stepped in and put up some of his own money to instill confidence. You tell me who is putting up their own money. Today we have a bunch of beggars mostly Wall Street and financial firms going to Washington for a piece of the bailout money parade.
This time is significantly different. I have given you 10 reasons why nationally this recession will be the worst since World War II. Those 10 reasons still stand as we enter the new year. Yet California will face the pain on a more pronounced level because it has put its lot with real estate and finance. The heart of the housing bubble darkness started here in sunny California. Remember epic toxic mortgage dealers like New Century Financial out in Irvine California? Or who could forget the ultimate toxic mortgage factory Countrywide Financial which has miraculously disappeared into the belly of the Bank of America beast. Or what about the fact that the median home price in California flirted with $600,000 for a month in 2007? These examples have all disappeared. New Century Financial is gone and so is Countrywide. That $600,000 median price is now $285,680 if we look at the California Association of Realtors data.
Many people including those once skeptical now think that we have reached bottom because things became so sour in 2008. They will be shocked this year. Why? Just because things have fallen so quickly is not a justification that things will now go up. This seems to be the argument most mainstream pundits who believe 2009 will be a better year use. They use an iteration of the argument that goes something like, “2008 was such a brutal year, that it is now time to go bottom fishing.” Total non-sense. If you look at the data what we will see is continued weakness in the markets. More direct to California, we still have many issues to confront.
http://www.doctorhousingbubble.com/california-2009-economic-and-housing-forecast-examining-5-areas-showing-california-will-have-a-tougher-economic-year-than-2008/
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