Once they become more affordable for people.  Right now there are a lot of houses sitting on the market not sold.  They claim it takes around 6 months at least for sellers to catch up to the fact that home prices in California are falling like a stone.  By literally thousands of dollars practically weekly.  And with interest rates rising, that should force the cost of prices down further as it's harder for people to pay higher mortgages.  Also, with interest rates going up, more people with adjustable mortgages will be forced to either default or walk away and get better deals which should drive prices down even further.  Prices will continue to decline in 2009 and further when people lose jobs due to recession and unemployment continues.  The trend is downhill for a long time, and will stay down due to recession/Depression.  You don't need to be either a guru or a sear with a looking glass.