Data released late last year in Fortune magazine further speculated about a cooling housing market — at least on a regional basis.

Projections by Moody's and Fiserv Lending Solutions predict dipping existing home prices in 2007 and 2008 in a substantial number of the country's 100 largest metropolitan markets. The numbers were published in the December 25, 2006 issue of Fortune, billed as the magazine's 2007 “Investor's Guide.”

THE BIGGER THEY ARE … Whether these predictions come true, however, is far from a foregone conclusion. Max Dobens, a broker with the Jacky Teplitzky team at New York real estate firm Prudential Douglas Elliman, says “a two-year real estate prediction is like a seven-day weather report — it's not going to be right.” He says he hasn't noticed any depreciation in his market yet, and it doesn't sound like he's anticipating any in the future.

Los Angeles remodeler Bill Simone, president of Custom Design & Construction, says he “couldn't disagree more” with projections of decreasing home prices. Dobens and Simone say that homes were staying on the market longer in their respective areas, but that prices remained strong.

Even if pessimistic projections prove true, it wouldn't necessarily spell disaster for homeowners. Many areas had been red-hot during the so-called housing bubble. “Home values are historically very high,” says Chris Landis, co-owner of Landis Construction, in Washington, D.C. “It's all found money.” That relates to a point hammered home in the Fortune article, which stressed that while homeowners might not be able to get as much money for their homes in 2007 as they would have in 2005, they would still profit overall.

These markets include Las Vegas (–6.6% price change projected for 2007), Los Angeles (–5.4%), and Phoenix (–3.6%) in the West; Miami (–4.9%) and Washington, D.C., (–3.8%) in the wide-reaching Southeast; and New York City (–2%) and Boston (–1.7%) in the Northeast.

Interestingly, none of the 20 markets in the Midwest are projected to suffer a price decrease, and only existing homes in the Detroit–Dearborn, Mich., market aren't predicted to show price appreciation in 2007. That's good news for the beleaguered region, many parts of which missed out on the real estate boom. For instance, Indianapolis — which (anecdotally, at least) has been a rough market in recent years — is projected to see a 3% increase in home prices in 2007. And there are other markets across the country, such as Albuquerque, N.M., that have caught fire recently and are expected to remain hot.

NOT FEWER, JUST SMALLER Washington, D.C., remodeler Alan Abrams, of Abrams Design Build, says that he has felt “the big chill,” but in relation to project size, not necessarily the number of jobs. “There's still a lot of activity out there,” he says, “[but] people spending cash instead of equity makes a difference” in terms of project scope.

Indeed, remodelers in the potentially affected areas don't appear too worried. Manhattan remodeler Keith Steier says he's seen an uptick in business since talk of an impending downturn started circulating. Boston-area remodeler Gary Moffie says that although his pipeline is currently a bit light, all the architects he works with say they are very busy — a sign that his business will pick up in six months or so.

Landis notes that in his market, “people still have two good incomes” — something that rings true for many markets in which a decrease in home prices is predicted. Furthermore, with homes selling at or below the asking price in many areas, homeowners are less inclined to “trade up” by selling their current home. “Moving horizontally costs 15% of what your house is worth,” Landis says, referring to taxes, fees, repairs to the current home to prepare it for sale, and small renovations to the new house before moving in. “If you need more space, the first thing you'll look to do is renovate,” he says.