Why Are Home Prices Declining

"Real estate normally appreciates one to two percentage points above inflation. Between 2001 and 2005, however, real estate values increased 50 percent, giving sellers an abnormally high return. That drastic increase leveled off in 2006 and prices and sales began to return to more normal rates — although still far above historical norms — resulting in the third best year for real estate sales ever.

Ironically, it was also the first year that national median home prices declined since the NATIONAL ASSOCIATION OF REALTORS® began keeping figures in 1968. "

The rest of the article is at http://realtytimes.com/rtapages/20061215_housedecline.htm

Realty Times had this article. I think its important for first time buyers to see that this is a very small window. Prices will go back to NORMAL increases which historically has been 2% above inflation. Timing the market is difficult but there are good deals out there right now.