The rubber is about to hit the road for the still shaky residential market, both here in the Bay State and across the country, after the homebuyer tax credits expired at midnight Friday.

Some economists and market observers are predicting another drop in housing prices now that this multibillion-dollar subsidy is history, while others talk bullishly of market momentum and a recovering economy.

But how about the possibility of a third way, a return to the stagnant but relatively stable housing market of the 1990s?

That is what Karl Case, the retired Wellesley College economist and housing market guru, is arguing as he surveys the post-tax-credit landscape.

“We are in a bottom that is very similar to the bottom in the early 1990s,” Case said. And over the next few years, Case predicts no dramatic shifts one way or another as home prices “bounce around and seek a direction.”

It’s an intriguing argument, though one that is sure to earn Case barbs from both the housing market bears, cheerleading for another big step down in prices, and the housing market bulls.

And I am not sure I totally buy into it – if only we had to dig out after a more garden variety 1990s-style downturn.

Still, dismiss the co-founder of the vaunted Case-Shiller index at your own risk.

Case first stirred controversy this past winter when he called the bottom of the housing market.

That did not earn him accolades from housing market bears, convinced that only the home buyer tax credit was keeping the housing prices from falling through the floor.

But Case isn’t budging – he’s called the bottom of the market and he is sticking with it.

He acknowledges some of the challenges out there, from a “nasty” unemployment situation to rising foreclosures.

Yet he contends the current housing downturn is right on time, closely mirroring the late 1980s’ and early 1990s’ downturn, and the market is now ready for a stretch of relative stability.

That means minor ups and downs, but no significant gains for the next few years.

As he argues for the likelihood of relative stability, Case is also throwing water on the idea that we are in for another big decline in home prices.

Yes, the $18 billion tax credits are history. And, of course, the Federal Reserve stopped buying mortgage-backed securities last month after a trillion dollar shopping spree. That’s expected to eventually start pushing mortgage rates up.

But the federal government is still massively subsidizing the housing market, and that is not going to change anytime soon, Case contends.

Likening Uncle Sam to a gambler, the tax credit is just one poker chip in a big pile the friendly old gent in the top hat has shoved to the center of the table.

“In a sense they are sitting at the poker table and they are all in,” Case said of the federal government’s massive support for the struggling housing market.

A resurgent stock market and an economy that is starting to show signs of life will act as a backstop preventing a market implosion, Case contends.

“You have a spring market coming up, the stock market doing well. You have the economy doing surprisingly well,” Case argues. “All of that is going to spill over.”

But others are skeptical.

Olivier Garret, chief executive of Stowe, Vt.-based Casey Research, contends the housing market recovery is simply a federally-subsidized mirage.

With those billions in tax credit dollars now history, you can expect a significant drop in demand for homes. And falling demand, in turn, will bring down housing prices another 10 percent across the country.

Greater Boston, in turn, will see a decline, though a somewhat shallower one given the fact years of scarce construction has left the region with too few homes for sale.

Without federal subsidies, the economic fundamentals are just not there to support a continued surge in home buying.

Garret points to a nearly 10 percent unemployment rate and another 10 percent underemployed on top of that.

“You just have a population that cannot afford to buy into homes,” Garret said.

And of course, we have not even gotten into record-breaking numbers of foreclosures, with a years-long crisis, if anything, intensifying again.

Foreclosure petitions leaped 21 percent in Massachusetts in March over February, according to The Warren Group, publisher of Banker & Tradesman. Nationally, there was a 7 percent jump in the first quarter over the last three months of 2009, RealtyTrac reports.

That’s likely to start flooding the market with homes again.

And let’s not forget record levels of consumer debt as well.

It’s at this point, as we start to pile one gloomy economic fact on another, that Case’s argument that the housing market will finally see some stability starts looking much less like a sure thing.

Instead, the downturn we are just starting to dig out of looks a whole lot more like the Great Depression than anything else.

In fact, Garret contends we are doomed to repeat Japan’s “lost decade.” That was another case of a real estate bubble that burst, followed by years of flailing about by the Japanese government, with each round of stimulus followed by a fallback.

It’s enough to make the tough times of the early 1990s and the dull housing market that followed look pretty good right now. If only history would repeat itself here.

I’m not ruling out Case’s theory. But frankly I’m not betting the house on it either.