The PI had a nice market update and since I’m currently traveling, I figured I’d just point you to their numbers.  Some interesting tidbits from my point of view:

Listings for all homes (houses and condos) were up 26.4 percent in the
county and 27.4 percent in Seattle from a year earlier. The increases
were the smallest since January 2007 in the county and December 2006 in
Seattle, suggesting inventory might be starting to level off.

"The entry-level part of the market is much closer to being balanced
than people expect," Crellin said. "That part of the market is probably
not going to see much in the way of price declines."

If I had to make a prediction, based on the numbers I’m seeing and what I’m hearing from buying and selling clients, I’d say we’re likely to see prices bounce around +/- 5% from where they are today. 

For sure, buyers who’d been sitting on the sidelines are definitely coming back into the market attracted to the great selection and attractive prices.  On the other hand, there’s so much inventory that it’s gonna take a while to see prices appreciate more than low single digit %’s — probably for at least a year.

The biggest wild card is the national economy.  If people here keep reading about soaring energy costs, slowing national growth, and real estate contortions all over the country, many Seattle buyers will decide to continue to put off their purchase.  On the other hand, if energy costs stabilize, the national economy stops slowing, and the hardest hit markets across the country bottom out, Seattle is definitely positioned to stage a gradual comeback in 2009.