It appears housing starts, new home sales￼ and residential investment have already bottomed and will increase in 2012. All three had a "long bottom" of several years.
I think house prices￼ have "bottomed" too, but this is just the beginning of the bottoming process. I agree with Ms. Zelman that the "shadow inventory" will probably not push prices down further nationally (it probably will in some judicial foreclosure areas), but I think the "shadow inventory" will limit any price increases for some time.Read it at Calculated Risk
Housing: The "Long Bottom"
by Bill McBride
I think that things are more "iffy." It all depends on how the foreclosure crisis shakes out, how the sectoral balances look considering how economic policy decisions coming up are made, and whether there are any shocks globally. There are still many balls in the air resulting in uncertainties, and US residential RE is still fragile. The bottom may not yet be in, and it's not yet time to celebrate anything. The recovery generally seems on track in the US if all proceeds well, but that is hardly anything to bank on now. There are many areas of concern.
Two big areas of concern are structural. First, the housing crash has shaken belief in the maxim that housing always goes up and is the best investment. It may be that the American dream is now changing away from home ownership.
Secondly, the present structure of education is diverting funds away from housing into servicing student loans. This is delaying the schedule of rites of passage like marriage, family, and buying the starter house.
It is as yet unclear if this is a temporary phenomenon or a cultural shift. Looks like it may be the later, which would profoundly affect housing and the US economy as a whole.