Biz profs discuss housing

IRVINE — The Orange County housing market is in a rough patch but may stabilize by the end of the year, a UCI professor said Thursday at a conference hosted by the Paul Merage School of Business.

Kerry Vandell, a professor of finance and the director of the Merage School’s Center for Real Estate, told a crowd of several hundred people in the business community that Orange County was faring better than many other parts of California and should see an upturn within 12 months.

He noted that in the last year, the region had suffered from a more than 100% increase in defaults and a slowdown in construction, but he expected the housing market to level off by year’s end even while the industrial, retail and apartment markets dragged.

“Out of every adversity comes opportunity,” Vandell said during the breakfast conference at the Irvine Marriott.

During the event, which was hosted by the Irvine Chamber of Commerce, Vandell and Merage School Dean Andrew Policano spoke about the economy both locally and worldwide.

Policano, who delivered the keynote address, said the next decade would likely bring higher inflation, slower growth and a shift in wealth from the United States to other countries in the world.

A number of countries, Policano said, were growing at a faster rate than the United States — not just China and India but also Brazil, Malaysia and other countries often thought of as poor.

At the same time, he said, the large number of foreign investments would make it harder for the federal government to curb inflation simply by putting more money into banks.

“What happens in the O.C. does not stay in the O.C.,” Policano said. “This is a global economy.”

Early in his speech, Policano joked that the increase in attendance over last year’s conference mirrored the anxiety that many had over the market.

“Whenever the economy goes down, attendance at this conference goes up,” he said.

MICHAEL MILLER may be reached at (714) 966-4617 or at [email protected].