Valuations are around 2001/2002 levels. I don’t think we have reached bottom yet, but my crystal ball has been proven to suck. Either way, housing prices will be stagnant or will have incredibly low gains for quite some time.
Most of the economic types wring their hands about the US following Japan’s lost decade after their housing bubble burst. Personally, my friends in Japan still have a fantastic standard of living and could afford to buy a home because of the depression in pricing.