Town HALL
A Peek Into 2009
Real Estate Southern California asked five experts
for their predictions for the coming year. Here‘s what
they had to say.
By Don Jergler
The word prediction comes from the Latin phrases pre, or “before,” plus, dicere “to say.”
But the inability to travel into the future and come back and tell everyone what’s going to
happen won’t stop people from speculating about next year and those that follow. Right now,
it appears that calling the bottom has become the name of the game. What we really need is
a modern-day Nostradamus.
Real Estate Southern California asked five experts for their forecasts, or predictions if you
will, for 2009. What they came up with runs the gamut, including a brazen prediction from
a UCLA fanatic who assures us the Bruins will win the National Championship to a pithy yet
ominous comment that “We are in the Valley of the Shadow of Debt.” And of course, many of
our resident gurus try to hone in on what’s arguably the biggest question that looms on the
horizon: When do we hit bottom? Our experts also gave RESOCAL two bonus online predictions, so it would be worth your while to pay a visit to www.globest.com/california.
JACK KYSER
Chief Economist
Los Angeles County
Economic
Development Corp.
1. The market will bottom
out for residential towards
the end of 2009, with a
few laggards, such as the
Inland Empire (2010).
For office, the bottom will
come around the middle
of 2010. Industrial should
bottom out around the same time. Both depend on lenders getting their nerve back. As for retail, from strip to regional malls,
it’s going to take some time to work out of this mess. The roster
of potential tenants is going to be much reduced, and for some
retail developments, plowing them might be the best solution.
2. In 2009, job losses will continue to come in construction,
financial services, international trade, manufacturing and retail.
Also, keep your eye on local government employment as cities
are being whacked by both the retail slump—especially autos—
as well as the housing downturn.
“Southern California is in a recession (like
the nation), and the rest of 2008 and
early 2009 won’t be much fun.”
3. Southern California is in a recession (like the nation), and
the rest of 2008 and early 2009 won’t be much fun. However,
there will be a recovery as the region’s fundamentals are strong.
One problem is the shrill media coverage of the economy. It
seems like there is a “foreclosure crisis” story each week. Enough
already!
