Never said Realtors were a reason to buy or not, that's a silly notion.
Realtors should be considered a useful tool and information resource to help in the buying or selling process, Realtors don't "make" people buy houses or sell houses period.
I'm not familiar with your market because all markets are not the same, yours may be a little behind mine on the east coast. Overpricing will be cleared out by foreclosures and short sales and that stage must run its course.
What was your motivation to ask the topic question of this blog?
Are you a buyer, seller or just enjoy blogging? Knowing your motivations or asking more detailed questions can help others answer your question in a way that would be more helpful to you.
Medium income and home prices lining up isn't going to happen as long as artificial "Affordable Housing Mortgages" remain available, they only appear to make homes seem more affordable to those who could not otherwise afford to own without special programs in place that would requiring the lenders to offer more and more "affordable mortgage products" which in turn and to contrary to their main reason to exist inflate home prices. It's the human nature of undisciplined and financially irresponsible people to shop in the higher range of their affordability scale.
Unless a miracle occurs causing congress to change their stand on regulation of the very same lenders they've been accepting money from and forcing to offer "Affordable Mortgage Products" to do the opposite and require the lenders to use realistic debt to income ratios and better lending practices and follow these regulations, that income to housing price lining up thing ain't gonna happen.
"Some" congress members are a little too cozy with lenders & lobbyists like Fannie Mae and Indy Mac to actually change their positions regardless what they may say. Republican regulators tried and were slapped pretty hard for bringing up problems let alone calling for regulation reform or acting on the regulations in place. Just take a look at this uncomfortable to watch video of a 2004 hearing where Democrat after Democrat covered up and attacked the regulators "trying" to raise the flag on the Freddie & Fannie Scandal when they still had time to "do something" about the impending troubles on the horizon.
What Caused Our Economic Crisis? Bombshell
Kid simplified version Understanding The Financial Crisis--For Kids and Grownups:
This regular guy explains it pretty well to: http://www.youtube.com/watch?v=N5KqzZn55WM
Lenders don't have the same rules which apply to everyone across the board due to old and new democrat initiatives to level the playing field for the poor and financially irresponsible to live like folks with more money who show financial responsibility.
How you may ask? With home ownership affordability programs (which actually allowed prices to skyrocket in the first place with out of whack acceptable debt to income ratios and crazy payment temptation options like interest only, less than interest only negatively amortizing loans, ARMS, low income housing programs, etc.) Low income housing already existed, it's called a rental...
Supply and demand factors also have a huge affect which will always keep home prices higher in more desired and metropolitan surrounding areas.
In the east coast, particularly the NJ market real estate prices seem to be well on its way to stabilizing however we still have a way to go with getting rid of the excess inventory (approx 10 months worth). The good news is prices don't appear to be dropping further with any significance in the North Central New Jersey area that I operate in. Unfortunately politics is still affecting the inventory issue slowing consumer confidence with bailout spending, raising taxes, resulting job security scares and ultimately keeping consumer confidence down.
At least Obama finally stopped the daily gloom and doom rantings which have resulted in a slight uptick in consumer confidence but only slight despite all the federal and local state buyer housing initiatives in place.
I suppose now it's just a time game, we have to wait for the excess inventory to be sold off slowly as consumers regain their confidence in the American dollar and their job security before they bite on all the great incentive available to them now such as low prices, interest rates, $8,000 tax credit and other local government incentives. My guess would be by mid 2010 if all remains steady with no further outrageous sudden tax hikes or additional gov spending we should be in an official stable market once again.