by Calculated Risk on 5/19/2006 11:12:00 AM

A couple of quotes from the UCLA Anderson Forecast economists:

"The housing market was like a rocket that has gone up and now it's lost its fuel. Some people think it will stay suspended up there magically. We think it's going to come back to Earth -- sales will drop even more, and then next comes weakness in pricing."

Dr. Leamer, May 18, 2006

"Appreciation (in Bay Area) has been flat for six months. This is how a real estate bubble pops. It's not a price pop. It's a volume pop. ... It's not going to be pretty."

Dr. Thornberg, May 18, 2006

Both Leamer and Thornberg think prices will remain flat for a number of years unless the job market deteroriates (see Phoenix). In addition to jobs, I'd be concerned about any area with a heavy concentration of exotic mortgages. Either the loss of jobs, or rising foreclosures due to execessive leverage, could lead to significant price declines.