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What does this housing market term mean?

I keep hearing that the Denver housing market will take 6 monthes to 2 more years to "bottom out" or reach the "bottom" before it starts to stabalize. So, Here's My Question: In order to reach the "bottoming out" level, should prices of existing homes decline or can a market reach the bottom with sellers keeping their prices the same and just not increasing them? In other words, should prices go down in existing homes before they hit the bottom?

Public Comments

1. No...prices still the same...but people are just not buying. Thats when the market hits bottom.
2. A bottom just means that prices begin going for a long period. Today could be the bottom. It will be the point where people in general think a home is worth more money than they do now. I could go on and on until you fall asleep but I'll stop.
3. Imagine a ship sinking, it bottoms out when it hits the ocean floor. It will be going up and down until then. Homes will decline in price and people could owe more than the home is worth (upside down mortgage).
4. Everyone would like to know the answer to that question! There are many predictions, opinions, and theories. But the reality is this: you don't know that you have reached the bottom until you are on the way up. We will know the "bottom" retrospectively when hindsight will make everything clear.
5. Usually what I have seen is that there will be a whole bunch of houses for sale and not many buyers. Once the number of buyers has increased (or the number of sellers has decreased) things go back to normal. The prices of homes are not very flexible on the downside. I mean that people can not really sell their homes for much lower than they bought them for. They normally just hold onto their houses until the prices go back up even if they have to rent them out in order to wait it out. If prices go down to last years level or maybe down to the level they were at two years ago, that is a huge drop. Then prices go back up and things are much back to the way they were.
6. You've seen stock charts on the news, right? If so, then you've seen that, as stock prices decline, the line on the chart goes down. The lowest price that a stock hits before trending upward again is said to be its "bottom" because the graph line has reached its low-point for that cycle. Most markets (real estate included) can have several bottoms. The price bottom is the lowest average or mean price that properties sell for before prices begin trending upward again. You can also have a supply bottom, meaning there are few houses on the market, and a demand bottom, meaning there are few buyers looking for houses. The basic law of supply and demand says that when demand is low and supply is high (as is now the case) then prices will drop as sellers compete for business from scarce buyers. Short answer: Yes, existing home prices should (and will) continue to go down until equallibrium returns to the market, and then will slowly begin to rise again. A previous answer stated that prices down go down much. That's not always the case, and certainly isn't the case currently because of the high rate of foreclosure. Markets in my area are in a steady 2% per month price decline, and the market is flooded with pre-foreclosure short sales where borrowers are negotiating with lenders to sell their property for far less than is owed on the note. Unlike the stock market though, the real estate market is tremendously local, meaning that the RE market here may be very different from the RE market 100 miles away.