BEVERLY HILLS, CA-While It's a poorly-kept secret thatsingle-family housing problems are hamstringing the economy. Butthe end is not yet in sight—not by a long shot, according toexperts at yesterday's Milken Institute State of the StateConference. The housing slump “will stay tough for quite sometime,” said Jeffrey Mezger, president and CEO of KB Home.

Conservative estimates from the panelists hold housing'srecovery in check for at least another 18 months. In addition toMezger, speakers included: Countrywide Financial Corp. chairman andCEO Angelo Mozilo; State of California Treasurer Bill Lockyer;Milken Institute director, regional economics, Ross DeVol; andLewis Feldman, partner, Goodwin Procter LLP.

Mezger pointed to California's “terrible affordability crisis”as a chief reason for the downturn's resiliency. “Affordability wasin crisis before the subprime problems hit. There is at least ayear's supply of housing on the market, and it won't clear untilprices are lowered.”