"The comeback, said John C. Burns, president of John Burns Real Estate Consulting, Inc. in Irvine, Calif., will be driven by more young adults entering the home buying market-–but not before a further shakeout resulting from more foreclosures, more job losses, and a continually dragging economy.
The downward housing spiral, according to Burns, could be attributed in part to a push for homeownership to an "unsustainable" national level of nearly 70 percent. In the wake of the housing market collapse, the supply of homes for sale nationwide soared to its current level of about 4.5 million, which he said is about 2 million higher than the level needed to achieve balance between supply and demand. The silver lining: home price declines of more than 20 percent nationwide have eased the affordability gap between prices and consumer incomes, Burns noted. "The housing market will stabilize when we get back to a six-month supply [f homes for sale], when job growth stabilizes, and when monthly [house] payments get more in line with consumer incomes," he said."