Readers wanted to know what you see in the year ahead. "How about predictions of what next year brings? 2007." And here are some predictions from the mid-year 2006 thread. "It appears the call I made late last year, of a y-o-y decline in June 2006 for national US median existing home sale prices, was incorrect, or premature."

"One interesting thing though; I’ve started to see the first references to Calendar Year national median prices never falling. That sounds to me like some RE players are starting to worry that we will indeed see y-o-y national declines by the end of this year, and are preparing a fall back position where they compare all of 2005 with all of 2006."

One from Virginia. "My prediction is that the house we are looking to rent is also for sale and has be reduced from $710k to $659k just since March ‘06 and it will only continue to fall. It’s in Loudoun County, VA - Potomac Falls area. We saw several 800-700k homes with prices slashed out and reduced several thousands. I predict this will continue."

From California. "Predictions are a dangerous game. 40%-45% Real declines in So Cal. 15-25% nominal declines in So Cal. Certain properties will go for less but as far as the nearly useless stats tracked by the RE industrial complex that is my prediction."

"I am thinking late 2009 for the bottom in So Cal. I don’t think any appreciation will happen until later about 2012"

A general projection. "Inventory will continue to rise and the buyer seller stand-off will continue while both sides dig in fro the rest of 2006. Areas which have already experienced extreme appreciation will continue to slowly deteriorate, while outlying areas will continue slow appreciation as the outer reaches of the shock waves propagate outward."

"I would not expect meaningful downward price action until the coming wave of foreclosures and much anticipated workforce reductions associated with building and real estate begin to have an impact. This will be the BIG news for 2007 thru 2011 and when the storm abates I predict the middle class will be a whole lot smaller, the poor poorer and the rich richer."

"Property prices may well decline below the 40 year trend line as lenders swell their inventory of foreclosed properties and are forced to begin dumping en masse."

One from Washington. "I predict that by the end of the year, the Seattle area will finally start showing signs of the bubble seen in the rest of the country."

One from Florida. "I predict numerous Florida cities median prices will be negative yoy for Q2, several already are as of May. I think all of the following will show negative for Q2:

Cities YOY% as of May

Sarasota/Bradenton 2%

West Palm Beach 0%

Punta Gorda -2%

Panama City -1%

Melbourne 0%

Ft Lauderdale 3%

Naples 1%

Ft Myers 5%

Ft Walton Beach -9%

Ft Pierce 0%

"Already heard the first excuse for negative medians from a Realtor: 'Oh, this just means more first-time buyers were jumping in ahead of the rate increases. Median indications aren’t that reliable…'"

A couple on rates. "8% mortgage rates by 1/1/07, skyrocketing inventory, double digit mortgage rates by July, 07 as lenders overreact to defaults, which were caused by the lack of underwriting. Bye bye middle class."

Another, "If the Fed. decides to go to 5.5% at the next meeting, simultaneously stating they intend to pause at that level (barring dramatic economic changes) until the impacts have worked through. This would mean at least a 6 month pause (and wouldn’t be a bad strategy IMHO)."

"If the Fed. did this, I think long rates might go up a bit as the yield curve renormalised, but more importantly I think the housing market in many places would crater as the Great ARM Reset progressively kicked in."

One updated a view. "I retain my prediction of last year that this mid year the Fed will pause once here at 5.25% and resume. This is part because they need time to judge the effects of so many past increases and to avoid looking like they are meddling in the mid-term elections."

"No more cashing out, no more equity nomads, no more flipping. We’ll see the first halting stumbling steps this fall after a summer where no one budges and to the surprise of both sides nothing happens (except in the markets). Sellers won’t budge on price and buyers won’t pay those prices."

"Expect a groundswell of corporate relocations away from Bubbletown. Expect people to adopt the single word Bubbletown to stand-in for Bay Area, LA, San Diego, Phoenix, Miami, Orlando, etc."

Another had specifics. "EOY: Fed Funds Rate: 6% EOY. 1st National housing price YOY decrease : 9/06. State with biggest hit: Florida. 2Q Economic growth: 3.6%. 3Q Economic growth: 3.1%. 4Q Economic growth: 2.5%."

One from California. "High-level prediction: Stubborn Orange County sellers will not start making real price concessions until late 2006. 2007 will be a steady slide downward."

An economic viewpoint. "Personally, I think that a recession is baked in the cake."

1) Inverted yield curve.

2) MEWs are practically done.

3) RE prices are reversing.

4) Declining leading indicators.

"There is no more fuel left to burn. IMHO we are headed for a deflationary debt collapse that will crash the economy. People will not borrow to buy more RE when prices are following. A deflationary psychology reinforces behaviour, just as an inflationary one does."

From San Diego, "San Diego: less desirable areas will start to see real (>10%) reductions. Downtown condos will drop even more. Sellers are hanging on to their unrealistic prices in more desireable areas (but rarely selling)."

"Numbers of listings might start to drop or level off for 2-3 months as some sellers pull out, realizing they missed the boat….. And of course the Realtors will have to compare to 2004, because YoY will show declines."

And finally, "Mid year Prediction, 6-month forecast: 1. *Major* decline in the buyer pool by October, across the nation. 2. Continued growth of inventory at a steady pace over the rest of the year. 3. 1/4 point rate hikes at the next three fed meetings. 4. 'For Sale' prices will tend to remain at the peak, despite onset of seller panic in fall, or the peak minus 10-15%. People will hold onto their suicide loans hoping for a turnaround until all resources are exhausted and the bank forecloses and sells at auction."

"Cultural attitutes on renting vs. owning shift over the first half of 2007."