A real estate slowdown is probable in California and the United States in general, but the problems are not likely to lead to a national recession, according to the quarterly UCLA Anderson Forecast.Edward Leamer, director of the UCLA Anderson Forecast, said he does not expect real estate prices to fall significantly, noting that sales volume typically falls further than prices. The real decline will come in residential investment, he said, including new-home construction, repair and remodeling, and brokerage commissions on home sales. In California, the forecast calls for a real estate slowdown and a flat housing market. "We do not predict a recession, nor do we predict a substantial decline in average nominal home prices," said Ryan Ratcliff, an economist who prepared the California forecast. "This forecast us based on two arguments. There is not enough vulnerability in the usual sources of employment loss to create a recession, and the historical record suggests that average home prices do not usually fall without this kind of job loss." The UCLA Anderson Forecast can be found online at http://www.uclaforecast.com.

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