It is interesting to note that there are really 2 separate and distinct markets residing side by side in the same market place: the distressed market (repos and short sales) and the regular market. You can expect to pay in Louisville around 10 - 15% less for a distressed property. 35%b of Realtors interviewed recently by the National Association of Realtors reported that they had experienced an under evaluation of a home in the last 3 months.
It's my evaluation that the primary markets along the coastal cities will continue to lead the rebound with another 10-20% of gains over the next two years. Much of that is driven by foreign interest and monetary stimulus. As we go into secondary and tertiary markets or just away from the coasts, I see gains being more subdued, probably in the 0-10% range as interest drops in those properties and fewer buyers can qualify for loans to take advantage of the stimulus.
Of course, there are always going to be pockets that jump far away from that range. Just watch any oil or coal producing area.