Just sharing some thoughts here. Our economy is usually in about a 10 year cycle: Growth, Peak, Decline, Trough, etc. I think we are in the "Decline" phase. The last occurred in 2001-2002, so this may have been a bit shorter than usual. This has implications for all capital markets including real estate. If one were to use the assumption that the trough is next, and that we are in mid-Decline, one may surmise that 2010-2014 will be Growth years. One could also conclude that until then, residential resale real estate prices as a whole, excluding certain local markets, are in for more decline. There are events that may alleviate the pain, however. The lowering of interest rates has an effect of lowering mortgage rates, which in turn makes it easier for a borrower to obtain money to buy a house. However, with a massive supply of homes on the market, it makes sellers lower prices to attract those buyers until we work through this massive inventory. The number of baby boomers retiring in the next five years is enormous. And many baby boomers want to downsize by selling their large, expensive homes and buying smaller, less expensive homes. This competition has a downward effect on the price of a home for sale. There are upward forces on the prices of homes as well, but currently they are not very strong.
Rule of Thumb: Plan on 1 month on market for every $100K of price. Subtract or add a month for every 10% you are below or above the true market value for your home. Thus, if your home's true market value was $800,000 and you listed at $880,000, plan on about 9 months to sell your home. Now, in reality, it may take less, but this is just a planning figure to give you something with which to tentatively plan your life.
The decision to sell or keep your home is a tough one, and involves tax, legal, social and other financial considerations that only you can weigh. But if you are trying to make a decision based solely on market timing, I think that this market will bottom sometime between 2009 and 2010. Until then, we are likely to see a gradual decline in the prices of residential resale real estate. If I had to guess, I'd predict about another 15% decline for some real estate markets, including Albuquerque.
Hope these thoughts help, but again, I'm a broker, not an economist, banker, lawyer, tax adviser or anything else, so seek professional guidance by all means.