by Calculated Risk on 3/21/2006 09:42:00 AM

Jonathan Lansner writes in the OC Register: Even a 'soft landing' for home prices can be painful [for Orange County]. A few excerpts:

The much-discussed "soft landing" – where home appreciation moderates down to historical norms, or slightly lower – may create heartburn in the business climate.

This year, the local housing market has started off slowly. Prices are still at last August's level. And sales activity hasn't been this sluggish since 1997. Forget the doomsday predictions of a market in a downward spiral. Just imagine how difficult it could be for the economy to thrive in what some might call a normal housing market.

On mortgage equity withdrawal:

Everyday folks have reaped rewards in several ways. Most notable: Borrowing against the profits in their home.

For example, 72,000 Orange Countians last year took out $6.1billion worth of home-equity loans, according to DataQuick. Curiously – and a possible sign of a slowing real estate market – that's down from 88,500 equity loans worth $7.2billion in 2004.

The cold cash generated by real estate isn't the only thing that's let consumers shop until they drop. It's that perception of housing wealth that's allowed them to spend freely.

And on housing related employment:

By my math, real estate of all sorts – from lending to building to brokers to swabbing the floors of office towers – employed 253,000 in the fourth quarter of 2005.

That's up almost 80 percent since 1995. The boom turned the real estate community, so to speak, into 17 percent of all workers employed in Orange County.

See the article for a graphic on housing related employment in OC.