The San Jose Mercury News continued its random delivery pattern at my house today, so I actually read a newspaper this morning with breakfast in a very Ward Cleaver moment. (Consistent readers will remember that I read the NY Times online).
An article in the “biz+tech” section caught my eye: Recession Not Expected - But Forecasters’ ‘08 Outlook for State’s Economy is Grim. As I discussed in my special Halloween Edition Mortgage Mania Part 13, there is growing evidence that we will see a recession nationally in 2008 and 2009, and I gave some thoughts on how that would affect the local real estate market here in Silicon Valley. Economist Chris Thornberg of Beacon Economics was the source of the gloom and doom information, and you can see his presentation here.
According to the Merc, the fine folks at the Anderson School of Business at UCLA have gone out on a limb with “this half-hearted prediction: No recession in 2008.” The Anderson forecasters comment that they give their bold prediction “nervously” and that “real estate weakness will create a sluggish economy, but will not be enough to tip the state into a recession”.
In contrast, real estate in Palo Alto and the surrounding communities of Los Altos, Menlo Park and Mountain View is continuing to hum along, although at a noticeably slower pace than the boom years of 2004 and 2005. In general, homes are taking a bit longer to sell, but prices are holding steady, and we are still seeing crazy multiple offers on certain homes.
I think economist Thornberg put it best when he made an analogy with the recent earthquake in San Jose., stating that Silicon Valley will be shaken but not flattened by the coming economic upheaval.
Thanks for reading.
Tags: Palo Alto, Real estate
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