At this point they need to find a natural level before they can start appreciating much.

I'm not so sure of this. According to Case Shiller, home prices in most cities have risen every month since March--just about when the homebuyer's tax credit was put into place, and perhaps not coincidentally at the same time Bernanke embarked on his Quantitative Easing campaign and when the dollar peaked and started its 15% descent. It would appear that artificial stimulants like the tax credit indeed did turn around the two year long continual cratering of home prices, and there is little historical precedent for this. Philosophically, I wonder if govt. ought to be meddling in the market encouraging sales of homes and new cars, but not other items, which actually might be of greater social value?

It is possible to give a short term boost to sales.

Yes, and in fact it seems to be possible to at least temporarily give a short term boost to prices, as well (the C-S index is up over 10% since February in many cities. Tax policy certainly distorts and has effects on individual markets. Tax cigarettes an additional $5 a pack, and sales will definitely fall. Give each homebuyer $8,000 and sales will rise and prices also. Theoretically, it would seem possible for govt. to restore home prices and sales volumes to their 2006 levels by simply printing enough money or by funnelling enough money to the housing sector, perhaps by bestowing yet more tax goodies on it. But this would not be a socially useful goal in my opinion, even though it might be considered as such by many politicians. Republicans might favor this to shore up banks balance sheets while Democrats could claim it was a populist move. One thing's for certain: if the two parties actually unite in a common goal, our goose will be well and truly cooked. We're getting very close right now...dangerously close to wishful, delusional thinking.