Business Week asked a bunch of economists to look into their crystal balls to try to predict what the housing market would do over the next year. The general consensus was not too encouraging:

Home prices will continue to fall in some markets, and the rate of price appreciation will slow in most places. Declines in homes sales, which directly influence price trends, will set the stage for another year of price decreases in 2008. Foreclosures will continue to increase. For those struggling to hold onto their homes, their net worth will shrink as these homes lose value. Long-term mortgage rates will rise. Housing starts will see double-digit depreciation, the sharpest decline since 1991, the worst year for housing starts on record.

You want the good news? Home prices are predicted to be flat to up slightly on a national level in 2007, with many large markets seeing small increases. (Of course, if you own in Southern California, Florida, and Las Vegas, you’re screwed.) And although new home sales are almost sure to be down for the year, existing home sales will probably be flat. And in a glass-half-full spin, housing starts aren’t likely to suffer as sharp a drop as they did in the early ’90s or early ’80s.
How Bad Will the 2007 Property Market Be? [Business Week]