I wish my crystal ball was still working...
We've been experiencing an approximate 10% decline per year in the area (this is a rough number, and each area town will have its own exact figures - some towns have been hit harder than others). From the looks of things right now, I see the market staying relatively the same as it is now - lots of homes to choose from and small price declines.
However, many factors can affect this: Will the recent lender bail out have any effect? Will anything be done with the bail out monies? Will the new president release an economic stimulus plan to help the housing market recover? Will the media relent in its persistent negative reporting of the market, which tends to create a self-fulfilling prophecy? Will job losses be as great as predicted?
Most important is to consider what your needs are. Do you need to move? Can you afford to buy/sell? If interest rates go up, will you then be able to afford to buy/sell? Are you upsizing or downsizing? (this market can be a good opportunity for those looking to upsize).
If this is about your personal residence, do keep in mind that your home is not simply an investment vehicle. Rather, your home is your home and the investment benefits are a secondary consideration - primary considerations are cost, affordability and comfort. Yes, for a personal residence, comfort - do you want to live there? Will this be your home? Will you be happy here? - is a primary consideration.
If this is about investments, then a careful eye should be kept on mortgage availability and pricing as well as an eye for below-market sales. Mortgage options for investors have become extremely limited, and this must be a consideration for all investors.