Its still regional, and tied to jobs. I was laid off a year and a half ago in Michigan. I've since got another job out of state but our house has been on the market for over a year, and we just got our first offer yesterday. We're taking it.
We bought it back in '98 for $260,000, 2,600 sq ft, 4 BR, 2.5 baths, basement, nice yard, great schools. Since then, when home prices have got up 5-10% a year in many markets, I will be selling my house for $2,500 more than I paid for it 8 years later. Of course, after commissions, I will be losing $13,250.
The midwest, where home price gains have been modest, could be really wacked due to the auto industry going down the tubes. In the high price markets, as long as the economy stays fairly decent, and its an area people want to live, home prices probably will stagnate, or fall a little, and simply stop turning over. People will just live in their house and not see it as an investment and plan on moving on to something else every 2-3 years. Granted, those that were foolish enough to get 100% financing with an ARM are going to be in for a rude awakinging. But that is not the majority in any market.