Tony Polito, preparing to deliver a not-so-healthy housing report to Tampa Bay area builders, likened his role to that of a doctor about to deliver a painful shot to the patient's backside.

"I was going to play the funeral march," Polito joked as he spoke Tuesday at the yearly economic forecast of the Tampa Bay Builders Association.

The news wasn't entirely fatal. Despite a possible recession stalking the housing market, Polito said builders have started to work off the record glut of new homes that has led to mass layoffs in the construction industry.

With a healthy balance between supply and demand about a year away, Polito urged builders to create a sense of urgency with the home-buying public.

"For the home market, it's all about undecided buyers," said Polito, who works at the Tampa office of the housing research firm Metrostudy.

Polito's report was a mixed bag. First the bad news:

- New-home construction relies heavily on job creation. The rough formula is 1.8 new jobs for every housing start. In the past year, the region created 12,400 jobs, a third of the job creation of two years earlier.

- The region suffers from a glut of vacant developed home lots. A healthy supply would last builders 18 to 24 months. We've got a 40-month supply.

- Builders compete with acres of new homes bought by investors during the boom. And home prices have outstripped incomes. In 2002, 77 percent of new homes sold for less than $200,000. In 2007, only 21 percent of new homes fell into that category.

But Polito also fed builders encouraging signs:

- A horde of baby boomer retirees - the first boomers turn 62 this year - will supercharge the Florida housing market. Polito estimates the demographic surge could boost the state's housing demand by 80,000 units a year.

- The largest percentage of adjustable-rate mortgages reset in 2007, suggesting the worst of the foreclosure crisis has passed. Rates on many mortgages will increase this year, but it won't be anything like in 2007.

Polito said the task before builders is to weather a "no-growth mentality" in 2008.

"Sales and marketing are the two key words," he said. "It's a matter of exciting the buyer."