conference are looking forward to a stable year for the residential housing market. In a presentation titled "1996: Perhaps a Boring Year," John Mitchell, senior vice president and economist at U.S. Bancorp, compared the current economic climate to that of the middle to late 1960s, when growth was steady but slow. He predicts an additional decline in interest rates, perhaps down another 50 basis points by spring, depending on the upcoming budget reconciliation. For most of the 20,000 real estate agents in attendance here, 1995 has already been a good year. Home sales, at about 3.8 million, slightly outpaced expectations, according to John Tuccillo, chief economist for the association. "People came out of the woodwork" to buy homes when interest rates dropped, he told the group. Mr. Tuccillo expects median home prices to rise slightly, with a slowdown in the influx of first-time homebuyers being offset by a pickup in the people trading up to costlier houses. "It's different to find an economic period as prosperous as now," said Mark Zandi, chief economist for Regional Financial Associates, in another presentation. He foresees moderate, noninflationary economic growth at about 2.5% for the next two years. Such growth, in combination with dipping interest rates and high consumer confidence levels, should ensure a strong housing market, Mr. Zandi said. The only shadows he sees looming over the market's future are declining credit quality, and unstable economic conditions in Mexico, Japan, and Canada. In the United States, Mr. Tuccillo predicts U.S. Bancorp's home base of Portland, Ore., will be one of next year's hot spots. Some on the convention floor were expecting Texas to heat up. "We're looking at negative unemployment in the next six months," one Austin-based broker said to a Southern California broker. "Come on down." Mr. Zandi is also looking at "boom-like" conditions for the area from Texas up to Oregon, as well as promising employment rates in Florida, Tennessee, Georgia, and Kentucky. On the flip side, "you could draw a line from Springfield, Mass., to Washington, D.C." detailing the country's stagnant economy, he said. While Southern California - along with the Northeast - is expected to remain a trouble spot, many feel that housing demand has finally bottomed out there. "Everyone that's going to move out, has," said a Laguna Beach, Calif., broker.

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