SAN FRANCISCO -- A crash in California real estate prices -- widely predicted by many observers -- is "very unlikely," economist Randall Pozdena of the Federal Reserve Bank of San Francisco said last week.
That's because California housing is tied so closely to the state's overall economic activity, he said. California housing prices would fall drastically only if the state's economy goes down hill -- which Mr. Pozdena considers unlikely.
"If we are in a recession, we can expect some softening of prices, but nothing more dramatic than the
weakening of the economy itself," he said.
That puts Mr. Pozdena in opposition to recent predictions made in Forbes magazine and by Prudential-Bache Securities.
For example, Prudential-Bache analysts George Salem and Donald Wang project a price drop of 25 percent or more in California real estate by the end of 1991. The state's "great real estate boom is over," they declared.