There is a new normal.

Foreclosures up. Prices down. Once-stable housing markets seem like they were built on a real estate fault line.

The tremors roll across the country, devastating buyers, sellers, developers, builders and entire cities, and leaving folks wondering if they're on solid ground or if the "big one" is yet to come.

Forecasters expect the worst this year. Home prices will continue to decline in most markets in order to reach bottom, expected in 2010 for many major U.S. cities.

"We're not looking for this year to be a good year," says Bernard Markstein, senior economist and director of forecasting of the Washington, D.C.-based National Association of Home Builders.

Over-inflated markets earlier this decade are obviously showing the strongest price declines. Building permits in some cities have reached the lowest point since the early 1990s and are expected to stay that way into 2010.

"It's likely that we're still too optimistic," says David Stiff, chief economist with Fiserv. "The news is so grim every day, even households that have secure jobs don't have the confidence to purchase homes."

For Bankrate's annual look at U.S. markets, we sought forecasts from those who follow trends in home sales and prices as well as foreclosures, building permits, job growth and population trends.

Our panel of experts included:

• David Stiff, chief economist with Fiserv
• Ingo Winzer, president of Raleigh, N.C.-based Local Market Monitor, a real estate analysis firm which looks at housing costs across the country
• Chris Porter, a manager with Irvine, Calif.-based John Burns Real Estate Consulting and former director of Professional Builder magazine's Web site
• Celia Chen, senior director of housing market research at Moody's Economy.com, based in West Chester, Pa.
• Bernard Markstein, vice president for economics and director of forecasting, National Association of Home Builders

Prices plunging

Stiff adds that once prices hit bottom, they will be flat for three to five years, leading to a slow recovery in appreciation.

Chen, whose Moody's Economy.com "Housing in Crisis" study used Fiserv data, expects a 36-percent drop from the peak, in first quarter 2006, to the bottom of the market. Each region will see a bit of variation, she says, adding that some areas have already seen 25 percent drops.

"In 2010, prices will probably travel along the bottom for the first half of the year and start to slowly pick up in the second half of the year," she says.

Chen feels her forecast is optimistic. If the government's foreclosure mitigation plan isn't aggressive enough and doesn't keep foreclosure rates from accelerating, price declines will be more severe than 36 percent nationally, she says.