Bland says it's useful to start with a big-picture view: Home prices in some areas doubled or even tripled during the boom during the past several years. Prices have started to drop, but they're still high, he says. "A year or two ago, prices had reached wildly unsustainable levels, and a lot of it was fueled by speculation and funny-money loans," he says. "Prices may have dropped 10 percent or even 25 percent in some cases, but I think they can still drop another 20 (percent) to 40 percent, depending on the market."

As the credit market shrinks, so does the universe of potential buyers who have the means to pay high prices. Spiking prices on food, gasoline and heating oil have taken their toll on consumers. They're worried about recession and losing their jobs, which Bland argues will further dampen demand. "I'm certain we're still nearer to the top of the market than the bottom," he says. "If I had any flexibility, I would resist the temptation to buy now."

The high housing inventories in many markets suggest a significant imbalance between buyers and sellers, according to Bland. Sellers are looking at the prices their neighbors got a year or two ago to justify their prices.

Buyers, meanwhile, see those prices and wait on the sidelines. As bad economic news piles up, they feel little sense of urgency.

While any one of these factors might have an effect on housing prices, all of these in combination may end up being devastating for sellers.

"The mortgage crisis, the swelling inventories, and the threat of recession are combining to create a 'perfect storm' that moves us to a new, lower equilibrium," he says.

Bland points out history is on buyers' side. It took about four years to recover from the previous housing slump in the late 1980s and early 1990s -- which he says suggests there will be a few more years of pain in this downturn before prices begin to stabilize.

Many buyers recognize that it's even more important than ever for a house to be a good investment.

"The traditional pension is disappearing, and with the debt burdens that most people are carrying, it's increasingly difficult for people to save for retirement," he says. "A house is a big asset that can potentially yield cash at retirement through downsizing, relocating to someplace cheaper or taking out cash to invest it."

Bland says he's confident that good things will come to those who wait before buying, but he says there are risks. "Interest rates may go up in the future," he cautions. "And depending how much they go up, that can at least partially undo the advantage of lower prices."

Overall, he says, don't buy simply because you feel the market may be close to the bottom. "Consider whether or not you'd be happy with your home if you saw 20 percent or more of your equity vanish," he says. "I would definitely urge patience."