WASHINGTON – April 1, 2011 – Mike Castleman, founder and CEO of Metrostudy,

which tracks real-time data of the country’s inventory of new homes, says a housing

shortage is looming that will soon create a huge surge in demand for new homes. As

such, now is the time to buy, he says.

In the 41 cities Metrostudy covers, 78,000 houses are either vacant and for sale, or under

construction – that is less than a quarter of the new homes that fell in that category during

the housing boom in 2006 and way below the level of a decade ago.

“If we had anything like normal levels of buying, those houses would sell in 2½ months,”

says Castleman. “We’d see an incredible shortage. And that’s where we’re heading.”

The historic drop in new construction mixed with the decline in housing prices is laying

the foundation for a dramatic recovery in residential real estate, Castleman told CNN.

Castleman expects homeowners soon will start returning, which will drive up prices in

many markets later this year.

While demand remains low for new construction, he expects that to change. He foresees

the recovery following a similar path as previous ones: A severe housing shortage will

drive a big increase in demand.

“We’ll get a big surge in demand and the drywall companies will take a long time to

ramp up, and it will take years to get new lots approved,” he predicts. “Buyers will show

up looking for a house in a subdivision, and all the houses will be sold. The builders will

tell them it will take six months to deliver a house.” But they’ll want the house so bad

that they’ll “bid the prices up.”