Analysts' reports are usually stuffy and complex, but T2 Partners was anything but in a particularly depressing overview of the housing market.

It predicts much more pain to come, but at least did it in a way that provided me with my favorite line of the month.

It was what T2 Partners called the No. 1 immutable law of the universe: "If you offer people a lot of money to do something, no matter how foolish, unethical or illegal, a large number of them will do it."

Two corollaries came with that proclamation:

• "The more money to be made, the more bad the behavior."
• "The people engaged in such behavior will rationalize it such that they genuinely believe that what they are doing isn't foolish, unethical or illegal."

The folks at T2 Partners were talking about the circumstances leading to one of the greatest housing busts in history: Nearly 10% of all houses built this decade are vacant.

In a mammoth 155-page recap of the housing meltdown, analysts took a shot at former Fed Chief Alan Greenspan for keeping interest rates so low, and called the current stabilization of the housing market "the mother of all head fakes."

T2 thinks recent market gains are temporary, linking them to low interest rates, home-buyer incentives, seasonal factors, and defaults shifting from low-end to middle- and high-end.

T2 expects prices to fall a little more before hitting bottom in mid-2010 -- and to stay there for a while.

Analysts also project a deluge of option-arm defaults.

Those were loans that provide the borrower with the option each month to make a minimum payment until it resets upward within five years or sooner if values fall. They were popular when real estate prices peaked, and analysts at T2 said they wouldn't have been so popular if borrowers had any other way to make payments.

In a side note, the analysts said that almost 30% of all new autos bought in 2007 in California were financed with home equity, which is drying up. That doesn't bode well for car dealers, they said.

How bad the central San Joaquin Valley fares remains to be seen. It should be noted that not all analysts share T2's opinion.

Barclays Capital, for example, thinks the next wave of foreclosures will be smaller because many borrowers have already defaulted or will default beforehand.

Mark Boud of Real Estate Economics of San Diego has a similar sentiment. He told an audience at California State University, Fresno, that he expects a small bump, but nothing to the extent of what we've seen.