Nothing lasts forever. That's a clear message in a quarterly economic forecast - looking at the rest of 2005 and beyond - being released today by economists at UCLA.

While there's still room for growth in the state's housing market - and for more job creation in the booming inland county region that includes the Coachella Valley - nobody should expect the hot rates of increase seen over the past three or four years.

"I don't see the Inland Empire being in for a recession, but the coastal areas could be vulnerable," said Christopher Thornberg, a senior economist with the UCLA Anderson School of Management, in a phone interview Monday.

In the coming year, UCLA economists expect slowdowns in housing price appreciation and job creation, among other variables. But even if there is an economic letdown, the signs for much of California likely won't show up until mid-2006.

"In terms of the real estate market, you're talking about it going from a white-hot to a red-hot market," Thornberg said of the inland county area of Riverside and San Bernardino counties.

California housing supplies still lag behind demand, meaning prices should continue to rise for the time being.

Economists nonetheless are keeping a close watch on the real estate market, which has been a big generator of jobs and consumer spending over the past three years.

UCLA senior economist Michael Bazdarich, who has long studied the inland region, said Monday that Riverside and San Bernardino counties should continue to benefit from rising population and a diversified employment picture, which includes new manufacturing businesses and the valley's steadily recovering tourism industry.

Housing prices in the valley have not yet hit the heights of those seen in coastal areas, indicating they may still have room to grow as the population rises. A weakening dollar also bodes well for tourism in domestic destinations like the valley, Bazdarich said.

That weakening dollar, the UCLA economists note, should also help create demand for California exports, which in turn could generate jobs.

As long as the valley and inland region continue to see population growth, Bazdarich said, housing should stay in demand, and price appreciation should hold steady, even if it doesn't reach the rates of increase seen the last two years.

The area, however, could be affected if the state as a whole sees a drop in the housing market. The California market, Bazdarich said, is being affected not by overbuilding but potentially by "overbuying."

If employment can remain steady and diversified, it could help offset the impact if the state housing market sees a setback like it did 15 years ago, Bazdarich said.

"If housing prices hold up, the Inland Empire should be all right," he said. "But that doesn't mean we're immune from the effects of falling prices, if that were to occur."

The UCLA assessment for the rest of 2005 is similar to that of Chapman University economist Esmael Adibi, who is a co-creator of The Desert Sun Economic Index gauging factors like employment, building permit valuations, home prices and airline traffic.

While the third-quarter index has not been released, the second-quarter rating indicated that economic growth in the valley is continuing, albeit at a slower rate than the previous two quarters.

"Things are still generally strong in the Coachella Valley, even if the rates of growth right now are not as high as they were in 2004," Adibi said. "You would expect things to level off and to see a plateau. Those rates from a year ago are not sustainable."

For the coming quarter at least, hiring trends are looking up. Results of a study released last week by job placement firm Manpower said 47 percent of Riverside County employers interviewed plan to hire more workers from July to September. According to Manpower spokeswoman Evlyn Wilcox, that's up considerably from the second quarter, when 20 percent said they planned to add staff.

It also tops the figure for the 2004 third quarter, when 40 percent said they expected to boost hiring.

In their own jobs report released Friday, economists at the UCLA Anderson Forecast Center said the inland region has seen job growth "slowing markedly over the past 12 months," following a robust 2003 and early 2004.

However, economists said recent data from the state could be understating inland job growth, "especially in startup-intensive sectors such as manufacturing, construction and transportation/warehousing."

The valley's May unemployment figure of 4.1 percent was lower than Riverside County's (4.5 percent), California's (5.3 percent), and the nation's (5.1 percent).

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