The UCLA Anderson Forecast leans pessimistic so this is more positive than it reads.

“However, the absence of any serious economic weakness in the next two years suggests that a protracted bear market for housing is unlikely,” according to the UCLA Anderson Forecast.

“Thus, our forecast for the San Diego housing market is less building, weak sales volumes and flat to slightly falling home prices through 2007, with some improvements starting in mid-2008,” the report states.