SAN FRANCISCO (KCBS) -- This year is predicted to be a bad one for those either looking to buy or sell a home in California. Construction, sales and prices will keep plunging, according to Chris Thornberg of Beacon Economics.
"I am extremely negative about 2007," Thornberg said. "I see foreclosures going up in 2007. I think prices are definitely not going to bottom out. I think prices will continue to go down slowly."
Thornberg said those in the most trouble are newer home owners whose mortgages will re-set this year. The higher interest rates will mean larger monthly payments for many borrowers.
"There are a lot of people out there who are in trouble, who were promised that real estate could be a no-lose investment."
In fact, Thornberg sees the entire California economy for 2007 in a negative light. When asked why, he said the state is in a completely unsustainable situation.
“Consumers cannot continue to spend more than they earn," he said.
He expects the real estate market to bottom out this year and start to recover in 2008.
(RdD)
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