The new home market may not return to normal until 2011, a top housing economist has told a meeting of multifamily builders and developers in Hollywood, Fla.David Seiders, chief economist of the National Association of Home Builders, said it will be three or four years before the oversupply of finished but unsold houses is worked off and housing starts move back up to the 1.8-1.9 million-units-a-year trend line. The unsold inventory will be a "pretty heavy drag" on production, he said at the NAHB's Multifamily Pillars of the Industry Conference. As a result, he added, prices will continue to fall. "There's no question there is an oversupply of housing and that homebuyers know it," Mr. Seiders said. "So they are just waiting, and builders have no choice but to cut prices on a cumulative basis." Mr. Seiders told the conference that while the most recent data indicate that the inventory of existing condominiums has fallen, the situation is going to get worse. That sentiment was also voiced by Ron Whitten of Whitten Advisors, Dallas, who predicted that because multifamily structures have a long construction cycle, the excess in the condo sector won't start to burn off until 2009 at the earliest. Mr. Whitten described the condo outlook as "painful." The NAHB can be found online at http://www.nahb.com.

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