IN THE DOLDRUMS UNTIL 2012....
Merrill Lynch on the end of the housing bubble:
As we saw in the November housing starts data, the builders are now frantically cutting production.
But with the sales backdrop still softening, they may have to slice their construction plans by another 30% before we hit bottom on a cyclical basis. And, that bottom could be as long as a year away. Beyond that, weak demographic fundamentals point to years of sluggish real estate activity, particularly in terms of the "price". The looming dominance of the "move down" buyer suggests that home values will continue to soften long after the building industry mops up the current excess supply. In fact, real estate pricing in general can be expected to be in the doldrums through 2012.
....Here is what we really "do not get". There are still economists out there talking about how the housing recession is still local and not regionally broad based. We have no idea who their data vendors are. In our view, this clearly goes down as the most national real estate downturn since the 1930s.
But think of the bright side: at least the housing bubble kept the economy humming long enough to get George Bush reelected. So it was all worth it, wasn't it?