In an effort to reach out to the greater community, UCLA
Anderson School of Management is extending its focus from just Los
Angeles to other regions of California as well.
On May 3, a group of economists from the Anderson school will
hold a conference in San Diego at which they will discuss their
economic predictions on a national, statewide and local level.
In their forecast, economists will address issues ranging from
real estate, employment, income and interest rates, among other
topics.
George Lee, publications manager for Anderson Forecast, said he
expects a broad mix from the business and government communities
will attend the conference, which is open to the public for a
fee.
Lee said in addition to the four quarterly conferences the
Anderson economists hold, focusing on the nation, state and city of
Los Angeles, they conduct yearly forecasts which specifically focus
on another California region.
“In June, we’ll be focusing on real estate,”
Lee said. “So quarter by quarter, depending on what the hot
topic is, we decide what focus we’ll have in addition to the
regular economic forecast.”
In the past, the forecast has focused on Orange County and the
east Bay Area.
Thornberg said the forecast typically develops outlooks for the
local, state and national economy, in regard to where the economy
is going to go and what is going to happen to income, spending and
housing prices.
For this forecast, the Anderson representatives are working in
conjunction with economists at the Rady School of Management at UC
San Diego to focus on the city of San Diego in particular.
Christopher Thornberg, a senior economist at Anderson Forecast,
said the forecast will be focusing on San Diego because its housing
market is the first to follow a nationwide trend of depreciation
and a cooling of the real estate bubble.
“A bubble is a function of a period of time where there is
expectation in the marketplace and, as a result, people cash in and
it feeds up the price,” Thornberg said.
He said forecasters are worried about how the housing market
will affect the economy.
“We see depreciation starting to flow and overall sales
starting to decline, and when real estate markets cool,
construction jobs are lost, and real estate and mortgage brokers
lose their jobs,” he said.
Thornberg said that this depreciation could be attributed to the
fact that San Diego is an important center of tourism and is one of
the top 16 cities in the nation in regard to resources in the
biological and medical fields.
Edward Leamer, the director of Anderson Forecast, said the term
real estate bubble refers to the extremely high and unsustainable
prices for certain assets.
“When the market is hot you get a lot of sales. When the
market is cold, the result is that there is a lot of withholding
and people don’t sell. We’re at the initial early
warning signs,” Leamer said.
He said the housing bubble is 20 to 30 percent off its absolute
peak, and with another three to four months of sales volume drops,
it will be absolutely clear that the housing bubble has peaked.
“Sales volumes will drop substantially. The popping will
be more in terms of sales volumes than with real estate
prices,” Leamer said.
Leamer said that it is not certain at this time that the
forecast of San Diego will be held annually.
“We’ll see how it goes. Our goal is to extend the
reach of our forecast to customers who normally don’t come to
our conferences. We don’t study real estate, but how it
affects the economy. The big story is jobs and incomes.
That’s our focus,” Leamer said.