I also did not expect prices to fall this much this soon. I did as much research as I could before I purchased my home late last year, and I estimated that the bottom would be about 30% from peak. Knowing this I purchased a bank owned home that was about 30% below peak(mid 2005 pricing). Prices are currently at about the price I paid. With no real bottom in site, it looks like there will be another 20% drop before prices bottom in my area.

I am here for at least 10-15 years. Therefore the bottom of the cycle will not hurt me. I did lose about $120k in opportunity cost. But since I sold my last home in this same area at peak, I used that money as a down payment, therefore the $120k was bubble money.