Erica Pittman-Gaynor here.
The predictions here in California (I'm in Santa Cruz, specifically) are that prices will most likely continue to decline over the next two years, about 10% per year. Then they will take another couple years to get back to where we are now so it could 2012 before we start to see a rise in prices. Perhaps even longer depending on the next two years. It is an excellent time of opportunity, especially here in Santa Cruz, to buy what we consider affordable properties for our County. Some people want to wait to buy but if interest rates increase it will lessen their buying power. Also, we won't know we've hit the bottom until we start to go back up. Then the media will scream BUY, BUY and there could be a flurry of activity which will change the supply & demand dynamic we have now. It's going to be a very interesting four to five years but savvy buyers will see this as a time of opportunity and come out ahead of the game if they can buy now and hold on to it for 5 or more years.
Hope this helps, don't hesitate to contact me for further information in our area.
Have a great day!