Deutsche Bank published an excellent report comparing US home prices with Europe. Here's the key takeaway:

"US home prices will decline significantly further in 2008, begin to stabilize in the first half of 2009, and remain depressed for some time thereafter. As for Europe, house prices are likely to stabilize in 2010 at the earliest. Assuming a similar shape of the house price cycle as in the early 1990s, the next up-cycle in house prices is unlikely to occur before the middle of the next decade in either the US or Europe."

Let's hope Deutsche Bank is wrong, though I doubt they are.