I think the most pessimistic assessment from major housing economists is that inventory will peak in the 4th quarter of 2007 (which we are in) and prices will hit their trough in the 4th quarter of 2008. After that prices will stabilize and begin to rise, depending or which market you’re in. The 4th quarter of 2008 will be four yours exactly since the housing recession began. You may not see any noticeable increases until the 4th quarter of 2009 in most places. But at least when you have to sell something you can do it without a sense of panic.
While I certainly share some of the unease that many Americans have about the current situation, panic is not in my dictionary. I've been in some very dire situations in my past concerning housing and money, and I survived them. We'll all survive the current mess too. What I object to is the habit of Big Media to predict disaster and catastrophe every time there is some sort of predictable downturn in the economy or sector of the market.