A house price prediction site is below. Look to see what it says.
San Jose is expected to drop prices by 8.9% according to this site.
How long will it last? We have serious foreclosures coming until 2012. It could be a year or more to clear them all. That says 2013. Government interventions could slow things more. Maybe 2014. That is really the first year I would expect real estate prices could go up on a nationwide basis.
Do not forget, as long as high unemployment exists house prices will be affected.
1 unemployed people do not get mortgages.
2 unemployed people often do not pay their mortgages. That leads to even more than expected foreclosures.
Consider, if you wait to buy interest rates will go up by april. The free $8k will go away on april 30.
Higher interest rates are almost certain to lower house prices. Going from 5% to 7% interest rates buying power drops by 23.9%. House prices must drop to meet that buying ability unless incomes go up.
I hope this helps some.