When will the housing market turn around?
The National Association of Realtors is projecting that home sales will trend up this year.

"The timing of the recovery is a bit ambiguous because there are buyers looking for a bargain, while others are looking for more signs of stability. Still others are looking for interest rates to keep lowering, with prices still bottoming out in their area," says Molony.

However, he suggests the window of opportunity for buying is within the next six months.

But there is serious disagreement on that point.

"Overall my consensus is to wait another year to see how the housing market settles and see how capital gains plays out," says DeRose. She bases her thoughts on the fact that Census Bureau Data indicates this is the highest housing inventory in history with 17.9 million housing units available. In addition, foreclosures are at an all time high.

"I am recommending to my clients that they do not purchase another home or one on contingency unless their home sells first. Otherwise, they could end up carrying two mortgages."

"Over all, the real estate market won't be strong till the spring of 2009," says Bob Mecca, CFP, MBA, RIA, of Robert A. Mecca & Associates LLC. He recommends that people look now, establish a list of priorities and amenities and do their homework. Then, negotiate.

"Of course, Realtors will say to buy now, but the investment has to make sense and have appreciation potential," he adds.

Mecca believes people should wait and see if the economic stimulus package takes hold as well as keeping an eye on the Federal Reserve rate. "If the Fed starts hinting that interest rates are done with, then is the time to start investing and flipping homes."

Definitions

• Capital gain -- An increase in the price of something over and above what you paid for it. Capital gains receive favorable tax treatment. See the Guide's Glossary for a further explanation of these terms.

"Many people believe that the earliest turn around will be in the second half of 2008," Schwartz says, "while others believe it will not be till the first half of 2009. Other people think people will have a wait and see attitude until after the presidential election, which would prolong the market turnaround."

The bottom line, Molony points out, is that all real estate is local, and people need to understand what is going on in their local market area before they buy. Internet research is an important first step, and you need to know if it is a buyer's or seller's market locally or if it is balanced.

Molony projects that home prices will stay flat this year, but 2009 will lead back to more normal market conditions with prices rising 3.1 percent.