Outlook on California Housing Market Goes from Glut to Potential Shortage

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Housing markets in California have made a stunning about face: Lenders there now may face a housing shortage instead of the glut of a few years ago.

In a recent paper entitled, "Thinking the Unthinkable: Housing Shortage on the Way?" the California Association of Realtors warns that a scarcity of affordable housing could dampen economic growth, now that more Americans are expected to move to the state than leave.

For the first time in five years, net domestic immigration to California will be positive in 1998, as residents of other states flock to thousands of new high-tech, entertainment, and software jobs, according to the Business Forecasting Project of the Anderson School at …