David Sokol, chairman of Berkshire Hathaway Inc's (BRKa.N) MidAmerican Energy Holdings and a contender to succeed Warren Buffett, warned that the U.S. housing market still has a ways to go before bottoming out.


Sokol, who leads one of the largest U.S. power utility and energy pipeline companies, also heads up HomeServices of America Inc, the second largest U.S. real estate brokerage, title and mortgage lending firm.


MidAmerican's brokerage operates in 28 of the largest U.S. markets, and Sokol said the supply of housing still far outstrips demand. In the meantime, the economy is sluggish, with Sokol seeing unemployment rates exceeding 10 percent.


As we look at the economy, I have to be honest: we're not seeing the green shoots, Sokol said at the annual Ira Sohn Investment Research conference, which drew some 1,200 hedge fund executives to hear top investors share trade ideas.


That's not surprising to us. It took us 11 years to get into this mess where it is. We went into the emergency room last fall and by January the banking system and economy generally were in intensive care, and we'd expect it to stay there for some time, Sokol said.


If anything, the glut of housing supply could grow larger as a new wave of foreclosures and pending sales breaks on the market.


We think the official statistics of 10 to 12 months' backlog is actually nearly twice that amount, he told the gathering, which raises funds for the treatment and cure of pediatric cancer.


There is an enormous shadow backlog of about-to-be foreclosed homes and of individuals who need to sell but have time, and there are already six (for sale) signs on their block, he said.


Assuming the economy does not worsen, he said: It will be be mid-2011 before we see a balancing of the existing home sales market. He defined balanced as a six-month backlog.


The weak prospects for existing home sales, he added, means delays for any rebound in new home construction and for the broader economy.