I keep reading article after article about the housing recovery or lack thereof.  The importance is obvious.  Without the rebound of the housing market there will be no rebound of the economy.  It is that simple.

I have maintained from the beginning of my blog that we will probably see a “bottom” in the housing market sometime by the end of 2009 but the actual recovery will be slow and will take several years to play itself out. 

Why you ask? 

1. Supply vs Demand:  Too many sellers not enough buyers.  The only way to change that is to get the first-time home buyers back out in force.
2. Distressed Properties:  Too many short sales and foreclosures putting undue price pressure on the market.  It took us several years to “leverage-up” and it will take us several years to “leverage-down”.  
3. Credit Availability:  Lenders are still very reticent to make loans with any type of risk exposure.  Moreover, the appraisal process known for its uncanny ability to match the contract price on any deal has now become a very tricky proposition.  Maybe the lenders are putting pressure on the appraisers but never before have we seen appraisals come back below the contract price than we have here recently.
4. Unemployment:  Unemployment continues to rise into the double digits.  As long as people do not feel secure in their jobs they are not going to make one of  the largest purchases in their lifetimes.

The housing market continues to be plagued with problems of declining prices, rising mortgage rates, unemployment not to mention a myriad of other factors weighing heavy on its recovery.  The end is near however the recovery is still uncertain.