Wells Fargo’s senior economist looks at the Northwest as one of the stronger regions for the housing market.

“The economy remains strong in Boise and housing affordability is high, thanks in part to a median home price of around $208,000,” said Gary Schlossberg, senior economist with Wells Capital Management. “Home prices are expected to weaken fairly considerably in 2008 and 2009, however, and then appreciate roughly 2 percent per year from 2009 through 2011.”

Schlossberg spoke to bankers and investors at the Wells Fargo Focus annual report this morning at the Centre on the Grove in Boise.

“A lot of it has to do with demand, we’re well along in the pull back in housing construction,” he said, following the presentation. “We are seeing home prices decline and people that might otherwise have the wherewithal to buy a home might hold off buying a home until they get a better sense of the lay of the land, waiting for the dust to settle.”

Housing affordability, because of fixed-rate mortgages and home price declines, has improved, he said.

“We do think that housing demand could begin to recover around the turn of the year and, hopefully, home prices stabilize,” Schlossberg said. “It may lag in the inflation rate for a time, but not unravel in a deep way as we go through the 12 to 18 months.”