1. The residential housing market will dip again in mid-2010 before settling into a recovery in the back half of the year. 

Photo: Jeff Turner

The end of government programs that have been artificially buoying housing (home buyer tax credit and Fed's Fannie Freddie mortgage purchase program) will result in a slowdown in demand right at the height of the Spring season. Rising foreclosures will also push more inventory onto the market, putting additional downward pressure on home prices.

2. Foreclosure inventory will be a lot higher than some predict.

Shadow inventory should be seen not just as homes the banks are holding on to or that are still in the foreclosure process, but homes where borrowers have stopped making payments and have not heard from the banks.

3.  No more historic lows on the 30-year fixed.

Unless the government decides to extend its Fannie-Freddie purchase program or do something else to juice the credit markets, mortgage rates will rise steadily, probably leveling off somewhere around 6 percent.

4.  Commercial real estate will continue to suffer the ills of low vacancy rates, low rents and high default rates.

The biggest concern is credit, as billions of dollars in commercial debt come up for refinance with little to no takers.

Scoring 2009 Predictions:

Overall, consider it a B+. Here's how I fared on the individual nine:

1. I said foreclosures would get worse minus some kind of big government bailout.  Well they did get worse—even with the big government bailout.

2. Existing home prices followed foreclosures, as I said they would.

Current DateTime: 08:48:58 08 Feb 2012
LinksList Documentid: 34134938

• Autos: Two Out Of Three Ain't Bad
• Consumers: Forever Frugal
• Markets: Uncertain For Sure
• Media: Content (And Consumers) King
• Real Estate: Still On The Mend
• Sports: Less Luxury, More 3-D
• Tech: Go Microsoft, Goodbye Twitter
• The Big Picture: Big (Positive) Surprises

3. Existing home sales did bounce back, thanks to some government intervention with the first time home buyer tax credit, but they only bounced on the low end of the market.  That's because only the cheapest distressed homes can sell with unemployment as bad as it is.

4. New home sales did improve thanks to builders lowering prices and again thanks to the tax credit.  The "incentive" I said was necessary came from Uncle Sam.

5. Housing Starts did drop. Good thing.

6.  Pulte

PHM loading...

Quote  |  Chart  |  News  |  Profile

[PHM  Loading...      ()   ] ate Centex. Told ya' so.

7.  Commercial Real Estate was easy...it just followed jobs.

8.  CMBS is still all about frozen credit, as I said it would be.

9.  Did you buy a house?  I didn't.  I wanted to. Couldn't afford it.