That's what Lawrence Yun, chief economist for the National Association of Realtors, told local Realtors at the Manatee Association of Realtors headquarters Wednesday.
The market should be back to normal by 2009 and stay normal until - or if - there's another boom, Yun said.
His unofficial outlook is that by 2013, home prices will be "easily" 20 percent higher than they are now, and next year will see a rise in sale prices.
Also, the second half of this year should be stronger than the first half.
"It's nearly certain in my view that if someone bought a home here today, in five years it will see a 20- to 30-percent price appreciation," Yun said.
The market will turn around, and Realtors should be ready to respond, he said.
Housing is a fast-moving market, with wide variations across the country, Yun said. Even between Manatee and Sarasota counties there are big differences. South and southwest Florida are more damaged than central Florida, but sales are starting to increase in southwest Florida, he said.
"Price adjustments are bringing buyers back to the market," he said. Home prices tend to increase more easily than they decrease, as sellers aren't willing to lower their returns.
A Power point slide showed the percent change of national home prices from year to year grew consistently between 1990 to 2005, when it peaked. The percent change was much lower in 2006 than it was the previous year, then in 2007 it turned negative.
In Bradenton, the percent of change was highest in 2005, then in 2006 the area saw a negative change.
Home sales today are at the same level as five years ago, Yun said, and there are a number of "fence-sitters" who are able financially to purchase a home but unwilling to do so.
That could be because of comments like the one Federal Reserve Chairman Ben Bernanke made early this week, when he predicted home prices will fall another 5 to 8 percent.
It's puzzling why Bernanke would say that, Yun said, because it might make consumers wait the market out and the comment come to fruition.
This week Fannie Mae, the largest mortgage finance company in the United States, announced it will buy jumbo loans, or those for more than $417,000, for the same price as smaller loans.
As a result, Yun said, interest rates on jumbo loans will fall and mortgage rates will be more affordable, bringing about an increase in sales.
Also, the number of applications for Federal Housing Administration loans is increasing, he said, and home sales should increase as more and more people take advantage of those loans.
What Yun said was along the lines of what Mary Schmidt, a Realtor with Wagner Realty, was thinking.
"Because of his position, he really has a handle on the information," Schmidt said. "I thought he was wonderful."
Michel Cerene of Smith Realtors, an economist himself, thought Yun's words were refreshing.
The numbers Yun presented were helpful and took into consideration the local market, Cerene said.
"It's not the rosiest aspect, but it's not the darkest either," he said. "I hope he is right."
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