The answer to that one is yes, no, maybe and depends what part of the sky you are talking about.As mentioned here several times, the San Gabriel Valley has escaped the housing debacle relatively unscathed. Prices from Pasadena to Claremont are dropping, but averaging less than a 10% drop with some areas worse than others, viz. Pomona, Altadena, Covina. So, our sky is darkening, but so far this area has escaped the storm.L.A. County in general has done fairly well, though lenders now categorize it as “distressed”, and some types of loans are more difficult or even impossible to come by. Countywide, home prices have dropped about 9% over last year. That’s scant comfort in outlying areas, such as Palmdale and the Antelope Valley, where home prices have sunk 25%. To keep even that in perspective, during the boom years prices often rose 25% or even 28% EACH YEAR for more than FOUR years. Still, what’s happening in Palmdale is painful, and the sky there certainly seems to be falling, especially if you bought during the last couple of years or refinanced to the max.For more “stormy” perspective, consider this: in Las Vegas, whose population has almost literally exploded in recent years, the median home price is down 13.5%, the lowest in 12 years. In Phoenix, sales are the slowest they’ve been in 11 years, and the median home price has fallen 11%. Our own Bay Area has dropped an eye-popping 39.5% to a 20-year low, but the typical payment is still almost $3000 per month.What we all want to know, of course, is what about my part of the sky? I had been thinking of selling. Is now the time? Should I wait until things get better?It appears the situation is going to get worse before it gets better. If the nation manages to avoid a recession, and indications are good that if may well, with the uptick in exports due to the weakened dollar and the fighting spirit of the Fed in cutting rates, then the housing “correction” will be relatively mild, say a 10 to 15% drop. And, our prices will hit bottom this year, probably in the spring and summer selling season and then stagnate. However, if the nation plunges into recession, then the drop in home values will almost assuredly be precipitous and longer-lasting.So, the short answer is: if you want to sell in the next few years, DO IT NOW.