Readers suggested a holiday topic on predictions. "I’d like to see a weekend topic generally doing a critical analysis of predictions of when [insert any generic real estate market prediction here] is going to happen. The real estate people love to predict there will be a big turn around in the 4th quarter of this year, provide no justification and people here rightly call them on it."

"But people here make predictions too. I can see that 5 months from now as a prediction of a turn around is ridiculous on its face, but why is 2011 better? or 2016?"

"People sometimes analogize to the Japanese real estate bubble. Why is that a good comparison? People say the bubble will take as long to deflate as it did to inflate. Why?"

"I’m not looking for any guarantees. Just an explanation of your reasoning. Or an explanation/critique of the real estate cheerleaders’ reasoning (assuming they have any or have ever stated what it is). That is what is on my mind this holiday weekend."

One replied, "I have no idea what is going to happen. I only know what happened last time, sellers held out for years, 2/3 of the loss in value was inflation. The question is whether the exploding mortgages will speed things along."

Another posted, "Predicting the pace and severity of the decline is almost impossible. There are so many other economic factors (recession, employment, value of the dollar…) that predictions are guesswork at best."

"But there are macro economic principles that are in play. When you look at what occurred with pretty much every bubble for the last 500 years, you can predict where this bubble is headed, if not the exact timing. When you look at Prof. Shiller’s chart of home values over the last 150 years, and see that prices at 4x median income is the overwhelming average and mean, then you can predict that todays 9x - 10x median income prices are way out of whack."

"A return to the mean is inevitable. Will this be in quick declining prices or stagnant prices for years with values eaten by inflation is hard to judge."

"My guess is that with the bloated inventory, mortgage crises, and a slowdown of the economy, plus the vast amount of speculative buyers who can’t just sit tight. We will see price declines over a few years (2-4) as a return to the mean. The mean is probably 1997 prices plus inflation, around 30% -50% below current prices."

"My guess is based on recent downturns in the early 80s and 90s here and in Japan. In the case of Japan the bottom lasted 15 years, but most of the price decline happened early on. I believe the same thing will happen here. I think some buyers in the last few years will never see their house worth what they paid again in their lifetime."

One agreed, "The key point (imo), is the speed of decline driven because of tenuous mortgages. The subprime and Alt-A resets as well as the level of speculation (buyers not living in the purchase) will drive the speed of decline. These were not ingredients of prior RE bubbles to the level that they currently exist."

One reader looked at loans, "The resets are made up of two waves. The first started this May as monthly resets jumped from 25-45 billion dollars. They will hold at the 35-50 billion dollar level for around 15 months. They then fall back to 10-15 billion until late 2008."

"The second wave jumps back up to 35-40 billion in resets from late 2009-2010. Foreclosures run 3-6 months behind the resets."

"A look at a long term US chart since the origination of the FED (1913) shows market lows during the Congressional Election year. Expect a cycle low in 2010. I would not look to buy until late 2010-2111. Four years."

The Union Tribune. "Economists from Wall Street to the Federal Reserve are scratching their heads trying to parse the future of housing in light of worsening default and foreclosure rates."

"But they might have saved themselves some trouble if they had consulted Robert Gertz, a senior at the University of California San Diego."

"He examined the trends in San Diego County, considered by many to be the bellwether of the nation's housing markets, and predicted doom. 'San Diego will likely face the worst foreclosure rates in its history in the coming three years,' said Gertz."

"Gertz, who based his predictions on mathematical models that he verified using historic data, said the peak number of 7,605 foreclosures he projects for 2009 represents a 'best case scenario' because of the possibility that such failures could tip the local economy into recession and result in more distressed sales."

"'Home price deterioration reinforces foreclosures, which reinforces home price deterioration,' he said. 'This basic phenomenon is what causes the cyclical nature of the housing market as a whole.'"

"Alan Nevin, chief economist with the California Building Industry Association...said things may not turn out as badly as he thinks. 'It's my belief that there will be a spike in foreclosures, but it will be short and then recede,' Nevin said, with most activity happening by the end of this year. 'As long as interest rates stay in their current range (of about 6.2 percent for 30-year, fixed-rate loans) that should not be a problem.'"