I think we're getting close. Rebounds usually start with the lower priced inventory, as Sam said. The reason I believe he's right is that I'm working with buyers in all price ranges. The only ones who are currently writing offers are those in the low end (and a few in higher price ranges, if they feel it's a bargain). For the most part the higher end stuff is going to stay slow until credit markets loosen up and/or the markets stabilize.

I think we have started to see the market stabilize. One of the key things to watch is the credit spreads which have gotten better. Banks starting to loan a little bit more. We still have a few hurdles to get through in my opinion:

1. The moratorium on foreclosures pushed a lot of them out to April and earl may. So that inventory has to get chewed up. This typically does not affect the higher end areas as much as the lower and middle income homes.
2. Quarterly earnings. The market needs to get through the next couple of weeks where it will have to digest some pretty dismal earnings. I think we have seen a bottoming process there as well.
I think as we push through these hurdles over the next year we should see the stock and housing market improve. The money that the government has dumped into the economy is bound to cause inflation which means higher prices everywhere. Couple that with inventory shrinking you could have a short lived rise and followed by another bubble that pops (2-6 year process). Case in point the stock market over the last 10 years.

Julia,

Yes.......There is no other way to believe.......it will happen!

Julia
As previously stated the answer to your question is yes. Lots of builders have completely stopped purchasing new land for building so when this inventory is gone the only new construction will be greatly reduced and with the law of supply and demand the cost of new housing will go substantially upward. There are so many great opportunities to purchase new construction at a greatly reduced price now it would be wise for someone that is looking for new construction other than a custom home to seriously think about taking advantage of todays value with new construction.
Mary

The lower end of the market in the Greater Seattle Metro has really started moving in the past couple of months. Watch for this to spur the mid-market move-ups this year.

Yes, but no one can say when we will reach this point. Here is how I see the market. Prices in some areas have dropped to 2002 levels. Interest rates are at historically low levels and the inventory of homes is large. This makes a buyers market which we have not seen for years. All homebuyers should contact a Realtor and Lender NOW! Waiting will only cost you money.

Julia,
No matter if the market is hot or not, a good house in a good location with a good school is desirable. Think about it this way… Many buyers are not able to afford homes in central locations such as Kirkland as the prices are higher than surrounding areas like Renton or Everett. Although prices do fluctuate, know homes retain their desirability and value compared to other areas. There are just fewer buyers looking in slow markets.
Also, the more expensive areas tend to not only keep their value better as there are fewer short sales and foreclosures to decrease property values but are the first to rebound as they have more demand.
As for new construction, I work at CamWest's site in Redmond and have spoken to one of Murray Franklin's top executives and as any builder has seen, they are not making the money they would like to in this market so they are not going to be starting any new projects until it makes sense financially.
In turn, there will be less competition with new construction, in turn increasing the amount of buyers for resale homes.
Kenzie

It's going to happen, we just don't know when.

The clue will be to watch for new housing starts in your county. When that number starts to increase at a regular interval. It's one of the better indicators, though not a guarantee.