NEW YORK (Reuters) - The meltdown of the U.S. housing market is not over yet, and home prices will soon start trekking downward again as a flood of foreclosures looms, a well-known economist said on Wednesday.

“This lull in foreclosures sales has resulted in the price gains in the past few months,” he said.

“Foreclosure sales will increase, and home prices will resume their decline by early 2010 as mortgage servicers figure out who will not qualify for a modification,” he said.

Regulators on Friday shut California National Bank of Los Angeles and eight smaller related banks as the weak economy continues to produce a stream of loan defaults.The banks closed by the Federal Deposit Insurance Corporation were in California, Illinois, Texas and Arizona. They were divisions of privately held FBOP Corp., a bank holding company based in Oak Park., Ill.

This is going to go on for at least a couple of more years.

“We think that the second half of 2009 will be turbo charged by the stimulus and there will be a hand off to the consumer and that’s what you want,” El-Erian said. “But it’s going to be challenging. We worry that 2010 is going to have sluggish growth and high unemployment and lower valuations.”

As for the run up in gold prices, El-Erian said it’s not a good sign for the US economy.

The US faces high inflation because of the weak dollar and the Federal Reserve’s policy of printing money to counter the effects of the crisis, legendary investor Jim Rogers told CNBC Thursday.

“There’s no question the US is vulnerable to hyperinflation down the road or certainly the inflation we saw in the 1970s, I would expect that to come back in the foreseeable future, certainly in the next few years,” he said.