San Ramon Valley Times: Headlines

The housing market in California has fallen into a visible slump, and the downturn could erode economic expansion in fast-growing regions such as the East Bay, economists warned Wednesday.

Existing home sales have skidded, houses now languish on the market for longer periods, and the rate of home building has slowed

"California housing market conditions have noticeably deteriorated since September," Scott Anderson, Wells Fargo senior economist.

"Buyers stepped to the sidelines in the middle of 2005 and they have remained on the sidelines ever since," Atkins said.

Atkins also pointed out that a scenario where it takes three to four months for a house to be sold in the Tri-Valley is akin to the lag time seen in 2003.

The East Bay could be particularly jostled by the ripple effects of a housing slowdown, the Wells Fargo report warned. That's because construction jobs in the last year have become an especially crucial part of the economy in the Alameda-Contra Costa region.

"It doesn't really stop with construction," Schlossberg said. "You have other industries tied to housing, such as mortgage financing, title insurance, real estate sales. You have big-ticket purchases associated with buying a new home."