Foreclosures Could Reach 8 Million

Sandipan Deb, a residential credit strategist for Barclays in New York, said prices will drop another 8 percent -- to 2002 levels -- before beginning a recovery in 2014.

Douglas Duncan, chief economist for Washington-based Fannie Mae, said that 7 million U.S. homes are vacant or in the foreclosure process. Morgan Stanley's Oliver Chang said the number of bank-owned and foreclosure-bound homes that have yet to hit the market is closer to 8 million. With so many houses on the market, it will take several years for the landscape industry to see any recovery.

''On a national level, you have never seen a decline of this sort,'' Deb said. ''I would caveat that by saying you also have not seen an increase on a national level like we saw from 2002 or 2003 to 2006.''

In addition to the millions of vacant properties or foreclosures, owners of another 3.8 million homes -- 5 percent of U.S. households -- said they are very likely to put their properties on the market within six months if there is improvement, according to a survey by Seattle-based Zillow.

''This has the potential to create a sawtooth pattern along the bottom,'' Stan Humphries, Zillow's chief economist said. ''Homes begin to sell and a few sidelined sellers rush into the marketplace and flood the marketplace.''

- Courtesy of Bloomberg News