The U.S. housing market, which has been in a slump for several years, is headed for a recovery-- once the employment picture brightens.
This is the forecast from Bob Berg, a State College resident who is an operating partner for Atlas Holdings, LLC and a founding member of the Resource Information Systems International (RISI).
Berg was the guest speaker Thursday at the Roach-Bauer Forestry Forum at the Kane Country Club.
According to Berg, there are millions of vacant housing units in the U.S. due to the "overbuilding" of homes, including many that have never been occupied. He said the problem with the increase in "vacant shelter inventory" was heightened by "funny financing" that enabled families to "buy homes they couldn't afford."
Berg said there is "a very slow recovery" in home occupancy due to a "slow growth in employment and income."
"Yes, housing will recover," Berg said. "No, it won't happen tomorrow."
Berg, who received his bachelor's and master's degrees at Penn State University, said studies show there are "questions" about the impact of home foreclosures on the supply of vacant housing units.
He said "displaced" families that are forced from their foreclosed homes may "move into a rental unit." Such moves have "no impact" in reducing the "vacant shelter inventory."
Because some "displaced" families are forced to "double up" in a unit, there is "a pent-up demand" for housing, Berg pointed out.
According to Berg, forecasts call for the "excess" housing inventory to be "eliminated by 2012"-- if employment and income rises.
Once the number of vacant units is lowered, there will be "a demand for new shelter" with more "housing starts" and a "meaningful recovery" in the market, Berg said.
Studies show that the "pool of pent-up demand" for housing will continue to "overhand the market" and "put pressure on the housing stock in 2013," Berg said.
Although housing starts will rebound at some point in the future, Berg said there may be smaller homes, more multi-family residences and much different financing tools available. He said future home ownership levels are not expected to reach past peak years.
"The impetus to buy is much less attractive than in the past," he said.