Feds Can't Rebuild Housing in a Day

"First-time homebuyers haven't been hurt by the stock market because they're already broke," says Dave Luczkow, vice president of business development for OptHome, a Web site that offers housing advice.

Luczkow, a former manager of a Fannie Mae mortgage-security portfolio at Morgan Stanley, says first-time buyers have been hoarding cash and waiting for the right opportunity. Recent upticks in home sales provide evidence that prices have fallen far enough -- at least in some foreclosure-stricken markets, like California -- for a national turnaround to take shape in the not-so-distant future.

Still, housing transactions and mortgage revisions take months to complete and banks still have years' worth of bad real-estate inventory to sell. But the silver lining in the murky clouds of the housing implosion is that while a full recovery will not be speedy, measures have been put in place to get it under way.

"Real estate is local," says John Jay, a senior analyst of financial services at Aite Group. "So what you see in California is not what you're going to see in Pennsylvania. But to the extent that the government is putting capital into these institutions, at some point they really are incentivized to lend. That is their business."