California housing sector to have oversupply for decades

The U.S. housing sector has been the slowest industry to show signs of recovery from the recession, and experts project it may take several more years to improve. California - one of the states hit hardest by the housing bubble - may suffer from oversupply and a lack of demand for decades to come. According to a report released this week by nonprofit research firm the Urban Land Institute, current supply of standard subdivision lots exceeds demand, and will continue to do so for at least through the year 2035, even if supply production halts during that time. However, where demand does pop up, it will show marked changes from previous generations. "Generation Y, in particular, will have an outsize influence on consumer demand," said ULI CEO Patrick Phillips. "It is the largest demographic group this country has ever seen, and their preferences will influence every aspect of American society. Quality of life is a paramount concern to much of this generation, and they will be drawn to places that offer the best work-life balance." This may also lead to greater demand for consumer credit risk management initiatives, as lenders look to make informed credit decisions.