Will housing in strong metroplotan areas continue to trend downward?

DC Nothern VA house prices have dropped approximately 30%, A 500K house sold in 2006 is now on the market again for 350K. Can prices go substantially lower or should I buy now? The rates are starting to climb, however, the house price slide counters. 30Yr $1900/mo @ 5% for a 355K house vs another 10% drop, 300K house @ 6% is $1800/mo. It seems raising rates will only drive house prices down further and with alt-a and option loans maturing ar peak in 2011, it wopuld seem the housing prices stabilize after the forclosures dry up at that point. It seems housing value is due for another 20% decrease for a few years before recovering, making a house in even a strong metropolitan area possibly valued at 50% of it's 2006 peak. I would like some input on where the market is going. thanks in advance.