The overall market -- where sales of existing homes make up more than 88 percent of the total transactions -- has seen a slight rebound in the past two months, with sales up 3 percent from the December low point.
Sellers of preowned homes are more likely to cut the price of their house to move it quickly and have been doing just that. Prices are down in the existing home market, but the sales pace has been moving up during the past few months.
"Real estate is gonna get very cheap because you're gonna have a glut of it for sale with very few qualified buyers," said Peter Schiff, president of Euro Pacific Capital and author of "Crash Proof: How to Profit From the Coming Economic Collapse." "In order to clear that market, prices are going to have to get to fire sale levels."
The real key to a turnaround in the market, according to experts, is a speedy shakeout in the shaky mortgage market and a strong spring selling season. If both those things don't happen, there might be more downside to come.