No Chicken Little, the sky is NOT falling…
Nationwide, home prices are expected to drop 0.7% and the national media is all riled up. That’s what happens to asset values. They go up, then they go down, then they go up again. Just like stocks. Just like mutual funds. Over the long term any asset will appreciate if it is valuable (and well maintained in the case of a house). Prices don’t matter if you are not looking to sell (unless you really need to pull some equity out of your home). Overall, people should think about homeownership over the long-term, not the quarterly fluctuations that may or may not be happening in your local market.
If you are planning on selling your current home in order to buy a new house, this still should not be a huge issue. Getting less on your sale means that you are probably going to pay less on your buy. So again, the long-term view should win out.