Americans are worried about the economy and believe that a recession is looming, but their faith in real estate remains fierce, according to a Los Angeles Times/Bloomberg poll.
Nearly a third of those polled predicted home values in their neighborhood would increase in the next six months. Only 16% anticipated a decrease. The rest said values would hold steady.
Call it foolish faith or bold optimism, the forecast is at odds with the downward trend of home prices.
The National Assn. of Realtors recently reported that prices fell 2.7% in the last three months of 2006. Many economists expect real estate to have a rough ride this year, partly because of rising mortgage loan defaults.
Scott Richard Wallace, a San Diego carpenter, doesn't share that view. "Housing is always a good investment," he said in an interview after the poll. "I don't see it ever losing."
Real estate aside, however, the poll of 1,373 adults reflected widespread unease about the U.S. economy.
Most experts, including Federal Reserve Chairman Ben S. Bernanke, say there's little chance of a recession.
Americans have a much bleaker outlook. Sixty percent of the poll respondents said a recession was somewhat or very likely within the next year.
Two-thirds said they thought the country was "seriously off on the wrong track." This is down from 70% in a similar poll last month but otherwise the highest in 12 years.
"I see prices keep going up -- gas, produce, groceries, heating oil, electricity," said Martha Flynn, who lives in Chicago. "People are struggling."
Flynn, 47, said she had last been employed by a bank but hadn't worked in two years. "I don't think there's going to be a middle class anymore," she said. "You're either in poverty or upper middle class."
Economists say such sentiments often foreshadow trouble to come.
"Turning points are hard to catch," said Jared Bernstein of the liberal Economic Policy Institute. "A lot of time, people on the ground feel the economy's weakness before officials see the signals and declare a recession."
The last time the recession question was asked in a Times poll, in December 2000, 64% of respondents said a downturn was likely. Three months later, a recession began.
Officially, the economy is slowing but remains in reasonable health. The unemployment rate in March matched its lowest level in six years. Hourly wages are finally outpacing inflation. The stock market, always a barometer of mood, is buoyant.
