Citigroup (NYSE:C) Says Housing Supply will Outstrip Demand for Four Years

In somewhat troubling news, Citigroup (NYSE:C) says the demand for housing won't catch up with the existing supply until about 2014.

Josh Levin, an analyst at Citigroup Inc. said in a note to clients, “It will take three to four years to work off the excess supply and reach equilibrium.” This suggests, according to Levin, that won't be “a V-shaped recovery pattern” as expected by some in the industry.

Levin said there are close to 2.1 million homes on the market that aren't needed at this time. Those homes are measured by apartments or houses built to be lived in around the year.

This is probably why Caterpillar (NYSE:CAT) made their offer for Bucyrus (NASDAQ:BUCY), as construction equipment sales are sure to be down for the duration of that low demand for homes, making the need for alternative income to be generated, which Bucyrus would do through their focus on mining equipment.

The construction industry is in for a long struggle, as will be the overall housing market for several years.