Housing Analyst Predicts Turnaround Still Several Years Out

Forbes reports that A. Gary Shilling says avoid thinking the housing market is the key to economic recovery.  The housing market continues to flounder because like any goods-driven sector of the economy, the supply outweighs the demand, which pushes prices downward.  There is a surplus of 2 to 2.5 million homes currently on the market, and more will be going into foreclosure.  Shilling says the National Association of Realtors (NAR) estimates only the number of houses sold that do not go through the multi-listing services (MLS), and has not made adjustments since the housing downturn.  Further, he says due to the way the NAR counts sales based on surveys of realtors, the figures may be misleading.  CoreLogic checks records at county courthouses, and their figures are lower by a third.  In 2010 NAR said sales were 4.9 million, down from 5.2 million in 2009.  CoreLogic said sales in 2010 were 3.3 million, down from 3.7 million in 2009.  Shilling says it will take four to five years to work through all the excess houses.

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