One of the key questions for housing, jobs, and the economy is: When will the excess housing supply be absorbed? The answers depends on: 1) The current number of excess housing units, 2) how many net units are added to the housing stock, and 3) how many net households are being formed. There is no timely data for net household formation, and estimates of the excess housing supply vary widely. So the answer involves some guesses (I'll get back to these questions). The best data is for completions of housing units - although the number of demolitions is unclear. So the limited purpose of this post to to provide an estimate of the net units added to the housing stock in 2010 . Housing units include single family homes (included as 1 to 4 units), apartments (5+ units), and mobile homes. Demolitions are subtracted from the stock. NOTE: Table is based on Completions. Housing units added to stock: 2009 2010 1 1 to 4 units 534.7 480 5+ units 259.8 135 Mobile Homes 52.2 55 Sub-Total 846.7 670.0 Demolitions 2 200 200 Total 646.7 470.0 1 Estimates for 2010 based on completions through July. 2 estimated. Notice for 2010 that the estimate is for 5+ unit completions to collapse. This is already in the works as shown in the following diagram: Click on graph for larger image in new window. The blue line is for multifamily starts and the red line is for multifamily completions. Probably all the multifamily units that will be delivered in 2010 have already been started since, , it takes on average over 1 year to complete these projects. Since multifamily starts collapsed in 2009, completions will collapse in 2010. This finally showed up in the data for July as completions fell to 8.1 thousand from 17.1 thousand in June. Completions averaged over 14 thousand per month during the first 6 months of 2010, and will average close to 8 thousand per month during the 2nd half of 2010. Note: this decline in completions will impact construction employment in the 2nd half. Similar logic applies...

Here is a look at real-estate news in today's WSJ:

The government has bailed out Wall Street firms, giant banks, creditors of Fannie Mae and Freddie Mac -- and is trying to bail out people who've defaulted or are about to default on their mortgages. But let's say you're a hardworking family that has done nothing wrong except buy a home when the housing bubble was at its peak a few years ago. Your mortgage is now way underwater, but you're still making payments because you want to stay in your home -- and you're actually honorable. You're paying for everyone else's bailout, but because you have no equity in your house, you can't refinance to take advantage of the ultra-low mortgage rates that Uncle Sam's bailout strategy has produced. To use the technical term, you're being screwed.

According to Zillow.com, the number of sellers on the site who reduced their prices remained the same in August as July.

Citigroup is at the centre of a dispute among analysts and accounting experts over whether it should set aside funds to cover $50bn of deferred taxes, a move that would reduce its capital buffer and weaken its balance sheet

A roundup of economic news from around the Web.

Jack Donnelly put off selling his Capitol Hill rowhouse for three years until he thought he saw glimmers of life in the housing market this past spring. At $950,000, he said, the red brick Victorian is a "solid deal." - - - -

It doesn't make sense for the U.S. --

This article was originally published in the September 2010 issue of Asset Securitization Report (www.sourcemedia.com) While the Wall Street reform bill passed this summer did not directly address the GSEs, it nonetheless affected future prospects for restructuring Fannie Mae and Freddie Mac. As I wrote last month, the bill created a series of impediments to any timely revival of the private-label MBS market, making the housing markets highly dependent on agency-backed funding. As a result, GSE reform will be limited by the need to avoid short-term disruptions that would freeze financing for the housing markets.

From Alana Semuels at the LA Times: . A few excerpts: The U.S. safety net wasn't designed to withstand such a strain. The extent and duration of unemployment benefits vary by state, but 26 weeks is typical. Several federal extensions have increased that to 99 weeks in California and other hard-hit states. Even so, an estimated 3.5 million Americans will have run out of benefits by the end of the year. About 180,000 Californians have already fallen off the rolls. There are few other places to turn. Applications for federal food stamps and state programs such as CalWorks, which provides temporary assistance to families with children, are up sharply in recent years. ... Desperation is growing, said Ofer Sharone, an assistant professor at MIT's Sloan School of Management who has spent the last year interviewing dozens of long-term jobless workers. "The U.S. is clearly not equipped to deal with this high level of unemployment," Sharone said. "People are running out of benefits, health insurance, retirement and pensions." This article has several stories about people struggling with long term unemployment. This brings up two key points: What will happen to the '99ers? According to Semuels, 3.5 million Americans will run out of benefits by the end of the year. No jobs and no benefits means fewer households and more vacant housing units - not exactly what we need. Job creation will pick up when the excess supply of housing units, and the over capacity in many other sectors, is finally absorbed. That will happen eventually as the population grows and households are formed.