We all know, particularly those of us in the Bay Area, that the housing market relies heavily on location so much it's difficult to generalize, but there are some encouraging signs we may be close to a bottom. This link has some interesting charts which suggest the bubble may have finally deflated enough:
http://soberlook.com/2012/03/us-housing-relative-value-benchmarks.html
The chart not shown is a chart of the historical housing prices outside of the bubble years. In short if the housing market had never had a bubble, prices would be right around where they're at today:
http://www.jparsons.net/housingbubble/
This may not mean happy times are here again, but there's a chance we're past the worst of it.