Typically, residential real estate, as do most industries, run in cycles of 10 to 11 years. The typical pattern is 6 to 7 years of prosperity (sometimes booming prosperity), and then 3-4 years of a slow down or an adjustment period.

Currently, the residential real estate market has had almost 3 years of a cooling off period. Prices have reduced because of an over-supply of homes for sale for numerous contributing factors. The demand for homes has simultaneously dropped because of instability in jobs, consumer confidence and a whole host of other reasons. This has forced prices down on homes in this area to the prices of 2003 and 2004! 

For Buyers, this is great news. However, if the cycle model holds true to historical data of the last 50 years, the prosperity mode of a new cycle should start soon. Some reports I have recently read are saying as early as the 2nd quarter of 2009. Please understand that in order to identify a trend in this industry, at least 3 months of data is required to give credence to the idea that the market has turned around and a new cycle has begun. So, by the time the Buyer consumer knows that the market has turned a new direction, the buyer has missed out on the absolute best time to purchase a home...they will have missed the "best time" by 3 months!<BR>
No one really knows for sure, but my guess is that the new cycle has already begun. You won't hear about it on the news for another 6 months though.