LOS ANGELES-With a state budget deficit of $23 billion, eliminated redevelopment agencies, services cut across the board and reduced funding for school and social programs, one might say the financial situation in California is pretty grim. But the good news is that the state’s real estate industry is rallying despite the sluggish economy, say speakers at the recent Milken Institute Summit here titled, “California Real Estate: On the Cusp or Precipice?” Moderated by Lewis Feldman, partner and Los Angeles chair of Goodwin Procter LLP, the session revealed that the single-family homebuilding industry is showing signs of life four years after stalling, and industrial property continues to be an attractive asset class.

Feldman tells GlobeSt.com that the speakers were “basically pretty darn bullish, especially on the housing side and the ability to deliver new and existing homes.” Leslie Appleton-Young, VP and chief economic of the California Association of Realtors, and Jon Jaffe, chief operating office of Lennar Corp., spoke about pent-up demand and the existing lack of supply, indicating that “you’re going to see price appreciation on a pretty consistent basis between now and 2015, when interest rates are no longer assured to be held low by the Obama administration and Bernanke,” says Feldman.

Affordability is at a 10-year high, and more consumers are qualifying for loans as confidence in their jobs increases, the speakers said. Also, first-time home buyers are buoying the push for single-family homes, and Echo Boomers are driving up demand for multifamily housing as they move into their peak rental stage of ages 22-26. Feldman said speaker Robert Hart, president of Kennedy Wilson’s multifamily management group, indicated that he’s quite comfortable in the position of having two markets today—the renter and the buyer.