I would expect that as we finish 2008 and move into 2009, that sellers will begin to realize that the market has changed, as we move further from the height of the market in 2007. A more balanced market will likely take shape, but it wont be immediate. Qualified buyers will be able to purchase real estate off their highs, and get better values. Lower interest rates will certaintly help buyers.
I would expect that fundementals will become more important as we move forward, for both residential and commercial properties.
Ken