Here's a look at the S&P/Case-Shiller US National Home Price Index since 1987:The way Case-Shiller determines the index is quite interesting. The index considers individual homes that have been sold twice, and considers the price appreciation between those sales.
Based on the exponential trend line added below, we see that home prices may be close to normal levels. That doesn't mean they don't have further to fall, however. As long as confidence is low, and the economy is bad, home prices my continue to fall. But for those who have the ability to wait the housing market out until things stabilize, they should be able to realize prices slightly higher than what they are now, presuming the demographic factors that fuelled this trend line continue into the future.