What are prices going to do?

I have been hearing a lot of speculation on this particular question. Everyone has an opinion, and the facts underlying those opinions vary by location. First, national statistics may or may not reflect you local economy. Even state statistics may not have much bearing on your local situation. My market is Orlando, Florida which is unique compared with the rest of the state and the nation, but facing many of the same issues. Inventory is up, prices have come down locally. The differences come in the fact that Orlando has continued to add jobs (at a much slower pace), and sales have begun to increase (still slower than "normal"). Prices react to supply and demand, and they are affected by supply and demand. The supply went up, demand went down and prices held fairly steady for quite some time. Demand bottomed out, supply peaked and prices started coming down. The new lower prices stimulated demand, while supply has come down (ever so slightly). I see prices stabiliziing as supply and demand come more into balance. The closed sales so far this month have a median sales price of $210,000 compared to last month's median sales price of $211,000. The affordability index locally has also gone over the 100 mark meaning the median income buyer can afford the median priced home. www.DavidWelch.com, www.OrlandoAreaRealtor.com