Well, honestly, who knows.  But I can offer some insight into four new trends that might give us all an indication of where things are headed. 
 
Multiple offers on bank owned properties and some traditional sales:
We are now seeing multiple offers on many bank owned properties and even some very well priced traditional sales.  This could be an indication that the buyer feels the floor has been established.  In a correcting market it is often the bank owned properties that set the new floor for the market. Buyers bidding up prices on some of these amazing deals leads me to believe that the value has returned to the marketplace and the prices can’t go much lower.  The affordability matrix is back in line in most places (income vs price of housing) which is a solid indication of coming stability.
 
Incredibly low interests rates:
No matter how you slice it, 5% is an amazing rate - especially on a 30 year fixed loan.  Current homeowners know this, thus the huge rush to refinance; yet, the buyers in the market have yet to understand how incredibly powerful a 5% rate is versus even 6%.  We are seeing some indications that it has become cheaper to buy than rent and that balance needs to tip before the buyers flood back in.
 
Fewer unrealistic sellers:
Indeed there are a lot of houses on the market, yet most of them are way over priced with sellers who don’t understand the market, or hope it to be different than it is.  However, we are seeing fewer sellers trying to “see what they can get” than last year at this time.  More realistic pricing will mean more transactions in the marketplace.  Prices are generally back to late ‘04 to early ‘05 pricing.
 
Real Estate recovery first:
It seems most people in the Obama administration understand that the path to economic recovery begins with a solid real estate market.  That premise of understanding should lead to some important government programs to incentivize buyers into the market place.  We have to be careful, however, not to create a false environment that is not sustainable.  4% interest rates, for example, may be nice, yet are unlikely sustainable - which would be damaging to the market when the rates return to “normal”.