Financiers smelling the java on severity of housing slump

A J.P. Morgan analyst says we ain’t seen nothing yet. And, at last, some home builders and manufacturers’ groups are undergoing at least a mild confessional, too:

“It’s going to be a long time before we see it bottom out and recover,” said David Lowman, chief executive of JPMorgan Chase's Global Mortgage unit. “There's too much inventory already in the marketplace.”

Lowman and the three other participants in a round-table session before most of the (Mortgage Bankers Association) convention’s 4,000 participants differed slightly on the size of price declines still upcoming, but they agreed no price recovery is likely until at least 2009.

"I think this year we will see a 2 percent decline in national home prices, and we're projecting about a 4 percent decline next year," said Thomas Lund, an executive vice president at Fannie Mae.

Prices likely will flatten in 2009, Lund said, before gradually rising.

Lowman said it might be 2010 before the price decline ends.

There you go: a multi-year housing slump is being accepted by mainstream financiers, mortgage backers. It’s not far-out pessimism any more.