It doesn't take a rocket scientist, or even an economist, to know: As goes the housing market in the Golden State, so goes the economy.

The same can be said for many other regions in the nation where housing has become not just economic foundation, but the bedrock upon which the middling economy sits protected from recession.

But when UCLA's Anderson Forecast warns, not once, but twice this year of dire consequences ahead for the housing-led economy, the diversion of a rocket scientist's second opinion would be a welcomed, if denial-ridden diversion.

If housing tanks, the economy is going down too.

They said it again.

"On all these grounds, we believe housing is due for a sustained decline," economist Michael Bazdarich writes in the Anderson Forecast. "The remaining questions are how hard the fall will be and when it will begin."

In a repeat of this summer's "Beware the Froth" forecast -- from a group credited with being the first to call the nation's 2001 recession and California's early-1990s economic slump -- the Anderson Forecast is calling the economy bust if the housing bubble loses too much air too quickly.

Oh, yeah.

They're baaaaaaaaack.

A recession isn't in the cards, but don't gamble that the mortgage industry's easy money will continue to flow.

With or without a housing bust, the economy in California and the nation will begin to slip into the doldrums of slow growth in 2006 led by the U.S. housing market's sustained decline next year.

The forecast also said signs of the housing-led slowdown are already obvious in major California metros -- San Francisco County housing sales are off 20, San Diego County's reversal of fortunes yielded a 13 percent sales decline and, while Silicon Valley's housing market is still just barely in the seller's corner, it's on the ropes in some cities where the average sales price is less than the asking price.

"There are more signs of market plataeuing," said Edwin Resuello, president elect of the Santa Clara County Association of Realtors.

But that could all be good news for buyers as sellers wise up enough to lower prices and cash in before the potential for a bust becomes a reality.

"As an individual broker my opinion on the market is that it's slowing, but it's too soon to predict whether or not something noteworthy is happening. I am seeing more realistic pricing by sellers who are motivated to sell. This could just be seasonal slowdown. We won't know until we get into January. I definitely don't see a bubble. At best it's a leveling off," said San Jose independent broker Janet Houde.

The Anderson report also cites as warning signs:

• New construction of housing plunged 5.6 percent in one month, from September to October. Single-family housing accounted for a 3.7 percent dip.

• Both new and resale home sales are slipping

• Mortgage interest rate increases have pushed down the number of loan applications since late September.

• In some regions, homes are remaining unsold longer and the pace of housing construction is out pacing population growth.

"I couldn't quantify what I'm seeing (in Silicon Valley) as seasonal. There are a few homes on the market for 120 days and that's forever in Realtor-years," said Resuello, who is also broker-owner of Realtor World-Silicon Valley Homes in San Jose, CA.

Published: December 8, 2005

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.