P.S. It's a great time to be buying, in my opinion, especially if you can take advantage of some of the government assistance that is out there. I have statistics on historical prices from the various areas if you would like for me to e-mail them to you. Just let me know.
For example, as a Realtor, one of the areas that I focus on is around Tower Grove Park in central south city. One neighborhood whose prices have held surprisingly well is Shaw, for example, even though the RATE of sales has slowed dramatically. Because sales are slow, like everywhere, the immediate perception is that it no better than anywhere else, but when you look at the detailed stats, you see that sellers have been very firm in holding their prices, and buyers still buy. This indicates that the area is well thought of and well supported by long time residents, and bodes very well for long term stability and appreciation. They are a number of other local areas like this in both St. Louis City and St. Louis County. You just need to look past the gross large area statistics, and work with someone who can drill down into the data and get you the true story.
I can tell you that the areas that have always been a good value with good returns are expected to continue being a good value with good returns - ie look for excellent school districts, look for good solid neighborhoods where the neighborhoods are maintained well. I did a study recently and several of the school district areas in St Louis NEVER dropped in their overall selling prices over the past 4 years, but have continued to climb, while neighboring school district areas dropped. Those areas are going to continue to climb. Those are the areas that I recommend to the people that I work with. In addition look at the areas that have dropped slightly to their 2005 selling prices, but haven't dropped back to 2004 prices. Talk to the realtor that you are working with. They've got the data and will share it with their clients.