Gazing into a crystal ball may be great fun, but the accuracy of the information is up for debate. Heading toward 2007, the crystal ball becomes even cloudier as questions arise about the changing landscape.

Most immediate is the January changing of the guard in Washington as both houses of Congress hand the majority title to the Democrats after more than a decade of Republican power. Speaker of the house-designate Nancy Pelosi has said a priority in the first 100 legislative hours of the new session is an increase in the minimum wage. For all pundits who think such a step will juice the economy, there is an equal number who think it is the health of business that does so, not a pay raise.

Gasoline prices, now down slightly from the year's high, are expected to continue to vacillate at the higher numbers we have been seeing in 2006.

According to the Department of Commerce, consumer credit card debt continues to spiral upward, increasing 18% from a 2001 record $716 billion to a 2006 total of $857 billion.

Inflation is low and the Federal Reserve seems inclined to hold rates or at best raise them slightly by a quarter to a half point. And, of course, going into 2007, the elephant in the room is the ongoing war in Iraq.

Key to the future health of the home accents industry is what's going on in existing and new home sales, both of which have slowed in the last few months of 2006. According to the National Association of Realtors Economic Outlook, November, existing home sales for 2006 were down 8.6%, new home sales down 16.8% and housing starts down 10.6%.

The same NAR forecast estimates existing home sales will remain flat for 2007, while existing home sales will drop another 8.7% and housing starts will slow an additional 11.8%.

That said, the same forecast says both existing and new home prices will increase from 1% to 2% raising the median price for existing homes to $227,500 and new homes to $241,400. Interest rates, the NAR says, will hold around 6.5%.

"We now have the most favorable market for home buyers in several years, said David Lereah, NAR chief economist. "And most sellers who've been in their home for a normal period of homeownership are still seeing very healthy returns on their investment. Conditions for buyers have improved because sellers are flexible and mortgage interest rates are near historic lows. The market promises to be more balanced between buyers and sellers by early spring, supporting future price growth."

The other most significant factor is the opening and closing of retail doors, projected by many industry voices to be more intense in 2007. However you slice it, retail is tough and likely to get tougher.

In 2006 just in the traditional furniture store channel, stores like Benchmark, Wood-Armfield, Bay Furniture, Mastercraft Interiors, Rose and Storehouse shut their doors, while major chains like Bombay and Pier 1 struggled to stay alive.

As traditional doors close, windows open in other channels as Internet sales are expected to nearly double from 2005 to 2010, with 126 million online buyers in 2005 (63% of the population) online by the end of 2005. Another example: according to Jeannie Reeth, a senior category manager for home and garden for eBay, each week 8,000 pieces of furniture are sold and 7,000 comforters are sold. Each day, a sofa is sold every 17 minutes and a lamp every six minutes.

The waters are murky in terms of where growth will occur as retailers extend their brick and mortar stores to the Internet or catalogs and revise and refine their product mix to meet customer demand.

Considering the checkerboard landscape of retail, the Home Accents Today Universe Study projects a modest 3.3% growth in sales for 2007 to $74.2 billion. Growth in the channels of distribution will be focused in discount department stores/off-price retailers (projected up 6.4%) and home improvement centers/warehouse clubs (up 5.4%), primarily because more doors are opening than closing. Poised to increase sales as well as influence purchasing is the direct-to-consumer channel, projected up 8.8%.

The universe really is changing, both at retail and everywhere else. What do you think that crystal ball is really telling us?