My grandpa used to say "those who live by the crystal ball eat glass," but I'll boldly give you a prediction:
In the future, prices may drop, stay flat, or go up.
You can find arguments for every scenario.
Arguments for a drop in price: If interest rates go up, prices may go down. As long as the recovery remains jobless people wont buy, therefore prices may go down. When the "shadow inventory" hits the market prices may go down.
Arguments for an increase in price: If anything, rates have been going down not up, as long as it lasts (and it could last forever by the way) prices will be maintained. Inflation: If inflation sets in people will see homes as edges against inflation and that will prop up prices (I ran into an old guy in Santa Monica once who told be that he had bought his GI house back in 1945 for $15,000, now he could sell his home for $800k). If the dollar keeps dropping in value, foreign investors may start buying heavily in the US. If jobs a created, more people may buy and this may help prices.
If several of these phenomena cancel each other out prices may remain flat.
Perhaps it's time to simply remember the real reason why we buy homes, and that's to provide stable shelter for our families, to be able to improve the house and decorate the way we like, to have an time horizon when the house is paid off and we will live rent-free. If you want to persist in seeing a Real Estate as an investment vehicle perhaps your could look at buying income properties. I have sold several of them this year that actually had a positive cash flow in desirable areas. Properties that start putting money in your pocket immediately!
