I think that in most markets, we will see prices stablize near 2000 + inflation. It might even be lower in markets with hugh supplies.
I don't think we will start to see stablization until the first-time buyers come back to the market. Without easy credit, the first-time buyer can only get a mortgage the old fashion way, based on income and savings.
We have so many homesellers that are dropping their prices 10k per month to try to get buyers to even look at homes. The two problems my area is experiencing are deals falling through due to unlendable buyers and homes not appraising for sale price due to short sales and BPO's.
Until the short sales and BPO's are less prevalent, home prices will continue to fall. It will become a cash only market eventually, unless someone can muster up a huge downpayment, have exceptional credit AND get a decent interest rate.
For the buyers that have the qualifications, the market is gold. Not many people will tell you the reality of the market, and it is not all gloom and doom, just tough right now.