Posted by Leonard Steinberg on April 11th, 2012

Some things take time, unfortunately, especially economic cycles. We are currently witnessing the emergence of the housing market from a very deep recession (border-line depression) and if history matters, the slow recovery we are experiencing appears to be in line.

Housing bulls point to a stabilization of prices in many metro areas, overall sales at a 5-year high, a decline in the inventory of homes for sale, fewer foreclosures and record levels of affordability — thanks to rising rental prices, low mortgage rates and the steep drop in prices since the peak. Bears say national home prices are still falling, albeit at a slower pace, while buying a home is unthinkable for millions of Americans suffering from bad credit, tougher lending standards and high unemployment. In addition, many experts predict a massive “shadow inventory” of homes will come on the market at the first sign of a sustained bottom and believe foreclosures will spike again now that the $26 billion settlement with big banks has been finalized.

U.S. Housing and Urban Development Secretary Shaun Donovan, concedes there is no “silver bullet” to cure the housing market’s woes, but is optimistic about the outlook for housing and the government’s action to reverse the market’s downward spiral.

“There’s a broader sense we are poised for a stronger, consistent recovery,” he says. “If we can continue to see stronger sales, cut the number of folks falling into foreclosure [and] make sure adequate credit is available, then we’ve set the stage for a more sustained recovery starting this year.”

Housing skeptics will certainly disagree and note myriad predictions for a “bottom” in housing have all proven premature in recent years.

But Donovan sees “positive momentum” in the market for non-distressed homes and says President Obama is “doing all the right things” to help housing, citing, among others, the Home Affordable Refinance Program (HARP) and Home Affordable Modification on Program (HAMP), which have helped nearly 2 million families to date.

New incentives for Fannie Mae and Freddie Mac, among other lenders, to do principal reductions is another White House effort that could help the housing market. But the regulator for Fannie and Freddie, Edward DeMarco, continues to resist such proposals, citing the potential for moral hazard.

“This is not about some huge difference-making program that will rescue the housing market,” DeMarco said Tuesday at the Brookings Institution.

It appears the instant gratification we seek in all areas of our lives will not and has not happened for housing, and just like the past, a long, slow, but steady recovery is what is happening. But it appears we are at the tail end of the bad.