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Though she admitted there’s “no shortage of things to worry about,” the chief economist for Bank of America shared an outlook for the national and local economy this morning that was quite sunny.

Lynn Reaser spoke to Bank of America clients, executives and reporters at a breakfast at Point Loma Nazarene University this morning, about oil prices, consumer confidence and the hot-topic housing market in San Diego.

She said the bank’s general forecast for the nation’s housing market expects a bottoming this fall, with “prices weak until at least year end.” The likelihood of a recession is fairly low, she said, but mentioned Federal Reserve Board chairman Ben Bernanke’s address to Congress last week, in which he told lawmakers the current economic conditions represent a calm before the storm. “We’ve got a big train coming down the track and it’s got Baby Boomers painted on the side,” Reaser said this morning.

The risky factors in the San Diego and California economies are the housing market, the ripple effect to the retail market, high energy costs and potential immigration legislation that could significantly alter the make-up of the labor force in the state, Reaser said. But she identified the aerospace, shipbuilding, biotech, tourism, health care and commercial real estate industries as positives.

“We don’t think housing’s going to go through a ‘second down,’” she said. Creative financing and mortgages borrowed with no down payment are causes for concern but won’t cause a “massive ripple effect,” she opined.

As the economy becomes more global, Reaser said foreign investors may move in to the San Diego and California housing markets in force as housing markets around the world soar past San Diego’s prices. (Check out this AP story on a 77-square-foot apartment in London that is on the market for $335,000.)

Despite a for-sale housing stock that is largely unaffordable for San Diego’s working class households, Reaser said homeownership will continue to be a primary objective for the region’s families. And they’ll continue to use mortgage options that are already of concern to economists because housing is so expensive, she said.

KELLY BENNETT

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