[quote=UCGal]Ok… I think most people would agree that housing was overpriced during the bubble.
Do people want it to “recover” to the overpriced values? Or find a natural market.

For decades housing appreciated VERY slowly… Often less than inflation. People might have to get used to that mindset again.[/quote]

I think you’ve missed his point about what a real housing recovery means. It’s not prices. It’s construction.

If you had housing starts from their current half-century low rally at unprecedented — let’s say 60 or 70 percent — they would merely hit the average low of the past six housing recessions since 1950. Did you get that? We dug ourselves that deep a hole, so theres very, very little comfort here.

New home construction is lower than any time in more than 60 years. We lost 2.5 million residential construction jobs and probably an additional million jobs in allied fields…finance, architecture (sound familiar?) , engineering, loan, title and RE agents, etc. Almost every single recession in the last century has been lead out of recession by new home construction. Not this time. The fact that the economy has recovered at all given those job losses is miraculous. (Anyone that thinks that politicians could have done anything to fix the economy in the last three years is nuts. It could have been better. It could have been tweaked. But there is virtually nothing that could have been done to replace those 3.5 million jobs.)

I’m not sure he’s right. It may not take a generation nationwide. Some areas will recover sooner. But in markets like Phoenix, Las Vegas and much of Florida? Twenty years sounds about right.