But the news in 2004 isn't likely to be so spectacular. It will be strong, perhaps the second or third best year in history. Nonetheless, the real stories are likely to be buried somewhat deeper next year.

Here's a look at what might make news in the housing arena in 2004:

Price-bubble search

It's been two years since the first pundits started hollering about house prices being so high that they would have to collapse. The wait for the pop will go on next year, too.

Christopher Cagan, chief economist for First American Title, says home prices have been rising in a linear fashion in the middle of the United States, while moving in sharper cycles on both coasts. He thinks prices will move up about 5 percent in 2004 after jumping about 9 percent in 2003.

"The bull market is slowing down on the coasts, partly because interest rates are on the rise and partly because of affordability issues," he said.

Michael Sklarz, chief valuation officer for Fidelity National Financial, says a handful of coastal markets are vulnerable to home-price declines — Boston, San Francisco, Los Angeles, Seattle and New York. But he said mortgage rates would have to soar above 8 percent "or beyond for there to be any significant declines."

"Overall, there are very healthy conditions nationwide," Sklarz said.

Second-home havens

Sales of primary residences may fall off slightly in 2004, but sales of second homes and vacation properties will be resilient.

"Except at the extremely high end, most second-home markets have held up extraordinarily well, both in terms of pricing and absorption," said Philip Stukin, senior vice president of Destination Development Corp. in Los Angeles.

Second homes have become more popular in the wake of Sept. 11 and the three-year bear market in stocks that ended this year. Americans are placing greater value on family and home, and have decided that real estate makes a good alternative investment.

"Safety and security and family activities are becoming increasingly important in the second-home buying decision," Stukin said. "And people are more willing to purchase as an investment, seeing income generation, appreciation and an alternative to securities."

The most popular destinations have been regional drive-to areas — resorts or getaways that are within three or four hours by car from a major city.

"Barring a catastrophic event, the market continues to be strong, and we're optimistic," he said.

Leisure time spent at home

We have so many choices for how we spend our down time that making decisions about recreation has become downright stressful for many of us. The solution: stay home.

"The pursuit of the American dream is hectic, frantic and stressful for most. But one place has emerged as the sanctuary, and that is the home," said Jim Spring, president of Leisure Trends Group, a Boulder, Colo., consultant.

"It's the place we retreat to heal our wounds, rest, relax. Our homes need to make us feel good," he said. But that doesn't mean our houses are cocoons these days. Instead, they are buzzing with so much activity they can hardly contain all we need them to.

"Every family member wants their own space. We each need places to pursue who we really are. We need space, room to maneuver," Spring said.

That helps explain the fact that our houses keep getting bigger even as our average family size shrinks. But while we want those larger homes, we're also looking for them to be in smaller communities, Spring says.

Fisbo fuel

When mortgage rates rise, consumers try to save in other areas and that included cutting out traditional real estate agents and their commissions, says Colby Sambrotto, chief operating officer of ForSaleByOwner.com.

ForSaleByOwner.com estimates that 25 percent of the home-sales market in 2004 will be "for sale by owner," up from 20 percent now.

The pressure from Fisbos — the for-sale-by-owner moniker — and discount real estate brokerages will continue to drive down the costs associated with selling homes, Sambrotto says. Discount brokers and "for sale by owner" services will continue to chip away at the standard 6 percent commission rate, and more firms will offer negotiable and lower commissions as well as fee-for-service options.

Browning, graying of America

Housing markets across the country will look very different in the future. You won't notice it next year so much, but over time the shifting demographics of the American population are going to make for big changes.

The browning of America refers to the "growing role immigration is playing on transforming the racial and ethnic composition of our population," said James H. Johnson Jr., professor of management at the University of North Carolina at Chapel Hill.

The graying is the aging of the native-born population. Both trends will drive much of the housing market in the coming years, Johnson says.

"America is becoming more of a mulligan stew than a melting pot," he said.

One of the most immediately obvious trends, Johnson points out, is the dispersal of immigrants across the United States.

The traditional port-of-entry cities are giving way to places as diverse as Salt Lake City, Minneapolis, Charlotte, N.C., and Atlanta as destinations for today's immigrants, he said.