You've already received some good answers to your question., but I'd like to offer a few more thoughts. First of all, we can never know for sure what's going to happen to prices in the short term. So let's look at (1) what we do know, and then make an educated guess about (2) what to do about it.
(1a) One thing we know for sure is that interest rates will begin rising in 2010. How do we know that? Well, the Federal government has run all of our country's "credit cards" up to the max. in an effort to stimulate the economy. That plan's not working out so well. But even if it had worked, rates would still have to increase in the coming months and years. That's because the Federal Reserve has been artificially keeping interest rates low by lending money to the U.S. Treasury to pay our country's bills. This can't continue forever, or even much longer, because the more money we print, the less it is worth, meaning that it will cause major inflation over time. That means our country must resume borrowing from third parties (individuals, companies, and other countries), and those lenders expect a higher return on their money - - so they will demand a higher interest rate (they already are, but the Fed is shielding us from them for now). Higher interest rates mean lower housing affordability, an important variable for home buyers (looking for the most house for the money) and sellers (looking for the best price for their home) alike!
(1b) Another thing we know is what the local economy has been doing. Home prices, we know, had risen quite a ways above actual home values. Since then, "stimulated" by problems in the stock, job, and credit markets, they have been dropping in the US, in California, in Los Angeles, and in local markets like Downey (where I lived for 25 years, growing up on Richeon, later living on 5th Street, and still later owning a home on Chaney). Unemployment is up, meaning less demand for housing; foreclosures are up and more are on the way, meaning distress sales of properties that probably haven't been kept up very well. All of this means that home prices have felt a lot of pressure and aren't going to rise dramatically anytime soon, though they could begin a measured rise, as homes historically always have, so long as their prices are now in line with their value. Are they? If you're looking for a Realtor, feel free to contact me and I'll create detailed charts of actual Downey real estate activity for you that will make that answer clear. I can do the same for you in Whittier if you have a home to sell there.
(1c) We also know that buyers are still in the driver's seat, though home inventories are trending downward in the most desirable (and least overbuilt) areas of Los Angeles. If you have a home to sell in Whittier, this is OK so long as you're trading up - - you should save more on your new home than you have to give up on the old.
(1d) At the same time, Downey itself has made some dramatic improvements through such efforts as redeveolpment projects, upgrading the downtown area, strong law enforcement, and an overall pride of ownership. It's really great to see this! Once again, Downey has truly become an attractive place to live (this may or may not be true in places like, for example, New York, so informed local market opinions are going to serve you much better than generic advice from the news media or afar). Therefore, though economic forces and a previously overheated market have pushed prices downard, the fundamentals of Downey as a desirable place to own a home are pushing back! So the inherent value of homes in Downey is rising, meaning the price of a home in good condition in a good location in Downey should not go down much more if at all.
(2) So, what should you do about all of this? Well, we don't know for sure what will happen to prices, but as I've shown above we do know for sure what's going to happen to interest rates. The smartest homebuyers and sellers are realizing that with prices much lower than before, buyers in the driver's seat, and interest rates much lower than they're going to be, and banks actually willing to lend again, now is an opportune time to get a good buy on a great home and lock in a good solid loan before rates head back up. FHA (3.5% down) or Jumbo FHA loans (10-20% down, offered here because California home prices are higher than in many other states) on single family homes are especially attractive, and credit scores in the mid-600's (instead of the mid-700's) will generally do the trick.
Hope that helps, and happy househunting!
South Bay Brokers, Inc.
Century 21 My Real Estate Co.
I keep on the real estate treads daily, if not hourly, and the professionals have a lot of different opinions.
Interest rates in the last few weeks have begun to rise, which means your buying power is being reduced.
Housing prices have started to level out and/or begun to rise because of multipule offers on properties.
The houses up for sale in this area have been selling with in a 3 month period or less. Which indicates we are in a sellers market.
But at the same time, I believe it is also a buyers market since prices have come down $100,000 to $200,000 in some areas.
The government buyer incentives are affect until the end of the year.
I look forward to hearing from you.