I have wirtten bfore, I think we are entering a more normal real estate market. This may be true for some segments of the market, however some segments of the market still have not reached equalibrium. First time home buyers have a number of obstacles. Investors with cash,tight mortgage lending and the reductionm of short sales since congress did not extend the forgiveness of  debt relief on taxes on residential homes has a significant impact on first time home buyers and the availablility of inventory. In a previous article I commented on the effect of student debt. Many of these factors and  dislocations will have a long term effect on the real estate market. So it may be a while until we see normalcy accross various price points.

"The consequence is that few Americans are putting their homes on the market, thereby limiting the economic growth made possible by sales. Because of the shortage of homes being listed, bidding wars have inflated prices in parts of the country to levels that squeeze out many first-time and middle class buyers."