Things seemed so much more hopeful just a year ago.

As the Boise Metro Chamber of Commerce held its annual economic outlook forum in November 2007, speakers predicted the Treasure Valley would miss much of the storm tossing the rest of the country.

An Idaho Statesman headline about the forum reflected the optimism: "Valley slump not expected to last."

What a difference a year makes.

"Nobody saw the train coming," said John Church, a Boise economist who was not among last year's speakers.

Now, as the chamber holds its economic outlook forum Wednesday, Idaho's economy is tracking closely with the nation's.

Unemployment is at its highest level in nearly six years. Ada County's unemployment has increased each month since January.

Home foreclosures aren't going away.

Retail is entering one of its most shaky holiday seasons in recent memory.

The Statesman talked with some of the participants in last year's economic forum and to other observers about those predictions that didn't come true.

HOUSING

In 2007, Portland economist Bill Conerly told the chamber audience that the Treasure Valley's population growth would reduce excess housing faster than in other areas.

Today, the local inventory of homes for sale is beginning to shrink. Between October 2007 and October 2008, the number of Ada County residential listings dropped by 508 homes to 4,340, according to Intermountain MLS. The median price for a home fell nearly 13 percent to $198,400.

Both indicators are a sign that demand is stirring, said Greg Manship, chief executive officer of Intermountain MLS.

"It's a pretty good time to buy in our market," Manship said.

But Church says the reduction in listings may reflect falling home values that are keeping people from putting their houses on the market.

He said the region from Pocatello to the Oregon border is overbuilt by about 10,000 houses.

"It will take to the end of 2010 to absorb that excess housing," Church predicted.

Wayne Forrey, director of Eagle-based Kastera Development, told the 2007 chamber audience that the local housing market had reached the bottom, and he expected recovery to begin in 2008. But Kastera Homes, a sister company, laid off some workers last summer. And last week, the Kastera companies' parent, DBSI of Meridian, filed for bankruptcy as its nationwide commercial-building investment and management business collapsed.

COMMERCIAL REAL ESTATE

The national commercial real estate market has entered a tough time. But Debbie Martin, owner of real estate brokerage DK Commercial LLC, told the 2007 audience that local demand would remain strong for retail and office space.

She was right, Church said.

But now retailers are crossing their fingers and hoping for holiday shoppers, and some have closed.

The amount of vacant retail space in Ada County and Nampa climbed by nearly half in the third quarter over the previous quarter, according to a survey by Colliers International. Vacancies went from 10 percent to 14.4 percent.

The country's mortgage mess directly affected retailing, Martin says now. People quit building houses, so subcontractors weren't hired, and the slowdown rippled into other areas.

At the same time, retail rental prices are high, and some merchants could be squeezed to meet those costs and other business expenses, she said.

"Rents got crazy when times were good," she said.

The worst may not be over. After the Christmas season, many store owners who have struggled through the year will have to decide whether they have enough money to keep going, Church said.

Retail closings could go sharply higher in January, he predicted. In February, "it is really going to hit home."

RECESSION: YES OR NO?

Last November, Conerly predicted the country had a one in four chance of going into a recession.

"I wish I had actually forecasted a recession," he says now. That might have encouraged people to do some planning, he said.

As Conerly was offering his vision for 2008, he and others knew there were a lot of houses on the market nationwide. He knew there were a lot of bad mortgages. But what he and many people missed was the high amount of debt taken on by many investment banks.

As many of those banks tumbled, credit froze and the stock market plunged. The U.S. Treasury began pouring billions into the economy to help restore people's confidence.

"Now we know the financial side," Conerly said.

Bill Roberts: 377-6408