I am a complete realist when it comes to numbers.  Numbers should always be taken with a grain of salt and you should always look at the potential agendas of the source.  Given this I came across an article which I found somewhat disconcerting.  It was called "Flawed housing data might mask depth of woes" by John W. Schoen.

In synopsis it stated that The National Association of Realtors (NAR) has been overstating the rate of sales of houses.  This in turn has made the inventory numbers which is usually referred to as the monthly supply of houses suspect.  Basically this number is the number of unsold houses divided by the pace of sales.  When you have about 6 to 8 months of inventory, prices are typically stable.  When you have under 6 months of inventory you have a tighter market and prices typically increase.  When you have over 8 months of inventory you have a market where prices typically decrease due to the large supply of houses on the market.

Apparently the NAR has been stating that there was an annual sales rate of 4.88 million home and thus an 8.6 month supply.   Meanwhile mortgage data and data from the private research firm CoreLogic  which track closings in over 2000 counties came up with much lower annual sales.  CoreLogic stated that for February the sales rate was 3.66 million homes on an annual basis which would mean that there is more like a 17 months supply of inventory.

How could such a discrepancy happen?  Well it turns out the NAR only polls about 40% of its members and it used to benchmark its data with US Census data.  In 2010 the US Census excluded some of these benchmarking questions  from the census.  Then the data is also suspect as with the collapse of the housing market there has been a consolidation of agencies.  Thus some of the agencies may be experiencing  higher sales not from purchasers buying more homes, but from more agents working for them.

In addition to all this I would also throw in that there is another factor the "off market" houses.  There are a number of houses that are for sale but are not officially listed because they are over priced.  The owners want to sell, but do not want to take the losses from their outstanding loans and home improvements they have put into the property.

Based on all of this you can expect to see national housing prices continue to decline at least in the immediate future.  Note though each neighborhood and locality is different and should be evaluated accordingly.