by Calculated Risk on 7/26/2007 02:06:00 PM

If anyone missed the post yesterday, we are having a contest to predict Existing Home sales for 2007 (to be announced in January '08). Please post your predictions in the comments to the contest post: Contest: Forecast 2007 Existing Home Sales

As food for thought, here is an excerpt from a Goldman Sachs piece yesterday: How Much More Downside for Housing Activity?

Today’s comment assesses how far the US housing downturn has progressed, relative to historically “typical” trough levels for both housing starts and existing home sales. If we are on our way to such a “typical” trough, both indicators would have significantly further to fall, from a current 1.47 million to 1.1 million in the case of housing starts and—more dramatically—from 5.75 million to 3.6 million in the case of existing home sales.

Even though our housing views have long been on the bearish side, these figures are well below our baseline forecasts, especially in the case of existing home sales. We do believe these “typical trough” results are probably too pessimistic, mainly because of structural improvements in the workings of the housing and mortgage markets compared with the 1970s and 1980s. However, the recent upheavals in the mortgage finance industry have made us less confident on this score.
Excerpted with permission.