Finally, a (mostly) balanced article from the WP: How Low Will It Go? Well, Where Do You Live?
Though the first half of the article (the 'above the fold' part) describes a Manassas homeowner who has lost $200K since buying last year, the article goes on to describe the stark differences between that Manassas market and the closer in areas which are seeing increases.
The Chicago Mercantile Exchange started trading a new instrument that is essentially a futures contract on the residential housing market. That index is predicting a 4% decline in the Washington area. Moody's Economy.com is predicting a 6-7% decline through the end of '08. But neither index makes a distinction by neighborhood, and as anyone who lives here can tell you, there is a world of difference between living in Manassas and living in Arlington.
The article also points to GMU's Center for Regional Analysis, which I've discussed several times in this blog, as well as my first-time home buyer classes, before. They think the national forecasters underestimate the strength of local employment, and they are predicting a 2% increase this year, then 4-5% in 2008. Who's right? Time will tell.