After several years of price declines in real estate caused by The Housing Bubble and Great Economic Recession, there are still many sellers that believe that prices will rebound. Although this could happen, there are compelling reasons that point to this being unlikely in the near future. As of the end of the 3^rd quarter, 2011, long-term sobering issues that continue to face sellers are:

1. Shadow Inventory– Standard and Poor’s estimates that it will take four more years to clear up the more than 1.6 million homes that that are in foreclosure or have been repossessed by banks but are not yet for sale. Banks are unable to clear the inventory quickly as it would drive down prices substantially.
2. Average Days On Market– The average days on market of homes offered for sale has increased from 164 days last summer to 178 days now, according to Realtytrac. Properties that are selling are priced aggressively and are usually the most desirable.
3. Global Economy– Is expected to see much slower growth at best. At worst, it seems poised for another recession.
4. Unemployment– Remains stubbornly high at 9.1% with no improvement in sight. Corporations have learned to achieve higher profits with fewer employees. Corporate profits are expected to decline and  the unemployment rate could rise even further. The Congressional Budget Office has indicated that the first stimulus package of $821 billion created 1.4 million jobs at a cost of $586,000 per job.
5. Deficit Spending in the U.S.- The Congressional Budget Office approximates that revenue for fiscal 2011 was $2.3 trillion, while spending topped $3.6 trillion. The deficit increased by $1.3 trillion. This means that for every dollar the U.S. Government collected, it borrowed an additional 56 cents. Worse yet, spending for 2011 wasn’t for the recession, it was spent from increases in Medicare, Medicaid and other entitlement programs. Paul Brodsky, of QB Asset Management states that the U.S. monetary system has about $53 trillion in liabilities and about $3 trillion to repay it.
6. European Debt Crisis– The solution to the debt crisis in Greece, Ireland, Spain, Italy and Portugal remains evasive. The EU has already spent billions of dollars on Greece without significant improvement.  Estimates that it could take $1.3 trillion dollars in additional loans to avoid sovereign default in Europe.
7. The Chinese Economy– China is another potential hotspot. With the Chinese Stock Market hitting its lowest point since 2009, Albert Edwards of Societe Generale believes that China is a credit bubble waiting to happen. He believes China has a severely imbalanced economy caused by credit-fueled investments and rapid housing appreciation. The growing trade-imbalance with the U.S. is also causing major problems.
8. Political Uncertainty– The Republican and Democratic parties have been unwilling to come to a compromise to resolve the problems with the economy and U.S. deficit. With elections looming just around the corner, there may not be significant progress until the presidential elections occur, or possibly until a new president takes office in 2013. This kind of uncertainty left unchecked, usually leads to paralysis.
9. Long Term Housing Price Recovery– At this point, many potential sellers have put their “Quality of Life” housing plans on hold for an extended period of time. If in fact, housing prices are bottoming out, at the average annual appreciation of 4-5% per year, it could be years before housing prices reach levels most sellers are willing to accept.
10. Quality of Life– Every homeowner considering a sale must continue to ask themselves, “If I were to sell today, what would it mean to me?” The answer to this question usually outweighs the financial benefits from a higher sales price.