I agree with Bove that there’s a high likelihood that prices will revisit the prior trough – which is about 10%-15% below where we are now. With slightly higher interest rates, reduced incentives and more foreclosures hitting the market, that seems logical.

But… I agree with other posters that – in so many words – the Officialdom has drawn a valuation line in the sand somewhere around the long-term trend valuations (which, again, are about where the trough was reached last year). So, we may fall off a bit from here, but if prices fall 10% or so, expect to see new incentives, etc. in an effort to spur demand to suck up all of the foreclosures.

That’s the will of the majority. Learn to love it.