Ken Rosen sides with those cautioning a downturn at his recent speech in San Francisco.
According to a recent San Francisco Business Times article:
Two great risks could bring an end to the Bay Area’s boom times: a hard economic landing in China or major players in the capital markets coming to their senses, warned Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley.
“This is the biggest boom we’ve ever had, and I have to tell you, ‘Booms never end well,'” Rosen said in speaking Monday at the Fisher Center’s 38th annual Real Estate & Economics Symposium held at the Westin St. Francis hotel in San Francisco.
“China is the single greatest risk,” Rosen said.
Far be it from me to argue with such a luminary, but I still see the Bay Area’s greatest risk being the increasing cost of housing (driven by NIMBYism) – as this translates into a direct cost of doing business which will continue to deter new endeavors and push existing projects into relocating instead of expanding – we’re reaching a structural cap on how much economic growth our housing stock and infrastructure (especially transportation) can handle.
Of course, a recession could solve those problems pretty quickly in the short term, but the business cycle will continue to turn and we need to plan ahead for the long term, not just the next couple of years.