California Housing Still Under Pressure

Housing markets in Northern California remain four to eight quarters away from a "bottom," according to an analysis by FBR Capital Markets. FBR analysts traveled to the region to meet with Realtors, mortgage brokers and property managers as well as regional officials from the Office of Thrift Supervision. "While the most stressed markets may be near a bottom, losses to the financial system will be substantial, and markets that have held up well thus far are starting to experience greater weakness," FBR's Paul Miller said in a report. Peak industry losses related to Northern California housing are not likely to occur until late 2009 or early 2010, FBR estimated. Weakness that began in "overbuilt, distant suburbs" is moving closer to higher priced neighborhoods closer to northern California's big cities, FBR said.