Prospects in the global real estate sector are "dismal" and the downturn could last for up to eight years, according to a new warning from the International Monetary Fund.
The IMF said it sees problems in "bust" nations such as the United States, Spain and Ireland, but also in what it calls "rebound" economies in the Asia-Pacific region, certain Scandinavian countries, and Canada.
In the U.S., residential investment remains severely depressed compared with past cycles, which the IMF says might partly be explained by the pattern in house prices and outstanding household debt.
In a report, the agency notes — not surprisingly — that the house price bust is more pronounced in states where unemployment has increased the most.
Last week, Amherst Securities Group predicted that 11 million U.S. mortgagors could lose their homes over the next few years unless the government does not improve its loan modification efforts.
In a research report, ASG analyst Laurie Goodman called the U.S. housing market "quite fragile," but predicted that the government "will attempt successive modification plans until something works."
