Continued price declines accelerating during the summer of 2008 and continuing this pattern until 2010. From 2010 forward, it will depend on interest rates, inflation, and whether we are still in a recession or do a double dip recession.

There is no problem with market, but rather with too high prices. You have yourself recently published an article witnessing increase in fairly priced housing...so, the sooner the prices get real, the sooner will the crisis talk cease. It surely is too bad for those who put all the eggs into the basket of endless price growth, but it's their credits...

Price declines will continue indefinitely if the credit market is tightened indefinitely. The median down payment in Baltimore continues to be 5%. That cannot persist and can only go up. When I see that majority of sales occur with 20% down payment, then I'll believe the price will stablize.

With the cost of everything increasing (i.e., gas, milk, fruit, etc.), what makes everybody think that home prices will continue to fall indefinitely?

I'll second Sean's observation about down payment percentages.

Until buyers are financially committed to the transaction by the larger initial investment, the price and financing numbers associated to the transaction will remain as skewed as they are today when compared to the home ownership investment stability typical of decades past.

When we look back at the price decline and 'recovery' after it happens (and it will) it will graph out as a "U" rather than a "V".

The real question is how long that bottom will last once we have gotten there and of course who is included when saying "we". \______/

For myself, I'd welcome that flat bottom. Houses are supposed to be bought for shelter and NOT as vehicles of investment growth.

Florida, California and Michigan probably warrant being categorized all on their own to not pollute the numbers the rest of the country use.