During a roundtable discussion with Bloomberg’s Mark Crumpton, housing market analysts, chief executive officer David Stevens of the Mortgage Bankers Association, CEO Jerry Howard of the National Association of Home Builders, CEO Michael Feder of Radar Logic and senior U.S. economist Michelle Meyer at Bank of America Merrill Lynch weighed in with their thoughts on how the housing market and the improvements made during its recovery.

While the majority of analysts were optimistic given the latest drop in refinances, increase of home purchases and composite price peaks, Feder quick to point out that the devil is in the details.

In the Bloomberg clip, particularly at 3:58, Crumpton ask Feder if it’s a matter of where the housing market has come from compared to where it still needs to go.

The economy could end up in a “sawtooth kind of year,” answered Feder.

He added, “Any significant improvement in prices brings out more of the pent up inventory for sale and that inventory has a dampening effect on those prices. Any significant weakness in prices brings in the REO and [single-family rental] investors, the hedge funds and private capital that are buying houses for conversion and that puts a little bit of a floor. But that may lead into a little bit of a band, which essentially doesn’t go up very much and doesn’t go down very much.”

So in layman’s terms what does Feder’s answer mean?

While the housing industry reflects for the first time in a very long time that improvements are being made and 2013 is shaping out to be the year for the market, there are loads of risks still in play.

The fiscal cliff and the housing market seem to go hand-in-hand. So when Crumpton asked the panel what effects a ‘potential recession’ would have on the market, the analysts reached a similar consensus.

Take a look at the clip during 7:05.

As long as there’s no ‘unusual shocks’ to the system then the housing market will continue to thrive.

But the elephant in the room remains, can the economy truly expect the system to run smoothly? Only time will tell.

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