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End of US housing slump? Maybe not.

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Debra Taylor Blair feels a new optimism, a budding hopefulness that is shared by many who track the real estate market: The worst of the current housing slump, she believes, may be over.

As president of a real estate information company in Boston, she tracks sales of condominiums in the downtown area. Last week she saw a turn for the better. Her firm found that in the most recent quarter, both sales volume and prices were up from the same period a year earlier. That came after two years of declining sales and a dip, for 2006, in the median price.

Could the housing crunch finally be easing?

"I ask myself that every five minutes," says Ms. Taylor Blair, of Listing Information Network. The latest report "shows the possibility that we're just coming out of the housing recession."

Although Boston is probably ahead of other big cities, the season of hope here is mirrored nationwide. Some economists believe the worst has passed, and most say they believe the housing downturn will bottom out some time during 2007.

But that forecast is a matter of hot debate, with implications for homeowners, home buyers, and the health of the economy. Some analysts say the downturn still has a long way to go. Homes are still priced out of reach for too many buyers, they say, and many more people want to sell homes than want to buy.

Upturn could be slow

Moreover, even if the market does "hit bottom" by midyear, housing could remain in a challenging slow patch well into 2008.

"Inventory is a challenge," says Phillip Neuhart, an economist at Wachovia Corp., a banking and investment firm based in Charlotte, N.C. "It's classic supply and demand."

Like many economists, he reckons that the trough for this housing cycle will come around midyear.

But that low point will involve an additional cutback in home building, he predicts, because builders got ahead of the demand during the past few years. And, he adds, this low point will be followed by an extended period during which prices may rise only modestly. Following the recession of 1990-91, for example, it took until 1997 before home prices began to post annualized growth rates above 3 percent.

Still, some of the recent signs in housing are positive. A week ago, the National Association of Realtors reported that the number of pending contracts to sell existing homes rose 5 percent in December.

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