If you had sold your home two years ago, there is a good chance you would have sold at the top of the market. Your home might well have sold at a higher price than any comparable home in your neighborhood had ever sold for before — or since.

There has been a steady decline in home prices over much of the country during the past two years. And there is no reason to believe the decline will be ending. Or, in a best case scenario, prices are stabilizing (which means at a minimum you shouldn’t expect to see your house appreciating for the next several years).

In Florida, at the end of this past winter’s annual “selling season” — during which those visiting from the icy North make their purchases before heading back home to spring flowers — many homes were selling for the same price they had been bought for during the 2005 selling season. One big reason for this is that many of those homes and condos sold in January and February 2005 were bought by realtors hoping to “flip” them. It was common to see a homes bought for $400,000 or $1.2 million be immediately put back on the market for $600,000 or $1.5 million. Many of those that didn’t immediately sell are still listed. But two years later, the prices have dropped back to what the realtors paid for them, these two are back to $400,000 and $1.2 million, but they still aren’t selling. And the reason they aren’t selling is especially important to you if you’re trying to figure out the market.

The home market for this past year has been dominated by: Value. Homes that offer the best values, or best prices, sell first. Those that are priced like it’s 2005 rarely sell at all. For home sellers who didn’t make the mistake of buying into the market in 2005, it is pretty easy to sell at 2004 prices, or even 2003 prices. All they lose is what they never gained. Sure, one or two nearby houses sold for a lot more in 2005 than what today’s typical home owner can expect to get for his or her castle this year — but, what no one knew when those two homes sold was that they were the last. And, very possibly, the last for a long time.

No one can accurately predict when home prices will begin rising again. But The New York Times found someone who can give you a good look at what part of the future holds — his point is that prices aren’t going up in 2007 or in 2008. They will probably keep going down. If you are considering selling in the next two to three years, the price you get right now, even with discounting your home in a market with way too much inventory and way too few buyers, might be substantially better than the price you can get in 2009 or 2010. Plus, you save the cost of maintaining a home that keeps losing value, and can put the money you get for it to work for you.

Here is what The New York Times reported after interviewing Christopher L. Cagan, director for research and analytics at First American CoreLogic, a mortgage industry research firm in Santa Ana, Calif.:

“He studied two databases with information on 58 million mortgages and sees a wave of mortgage resets moving through the system, first the mortgages with low teaser rates, followed by subprime loans and finally, as the decade comes to a close, the loans to homeowners with good credit.

This pig-through-the-python transition is not enough to hurt the overall economy — about $112 billion will be lost, he calculated — but it is a world of pain for the households involved.

Almost all of the teaser loans issued this decade — those mortgages offered for less than 3 percent — have reset in the last two years. Rates for most of the homeowners with good credit who obtained adjustable-rate mortgages during the boom years of the housing market will reset from 2008 to 2010. Mr. Cagan said he thought only 7 percent of these loans would default because of the reset.

He concluded that ”2008 is the pinch year.” If he were a gambling man — or a real estate investor, but really, what’s the difference? — he said he would start buying residential properties in 2009.

The bulk of the subprime adjustable-rate mortgages, those made to people with less-than-sterling credit reports, are resetting this year and next. About 12 percent of the subprime mortgages will default, he predicted.”

There are going to be three kinds of sellers in the market over the next few years:

1. The realtors and real estate investors who bought with the idea of quickly “flipping” or reselling the home to make some money. They have to try to get out at their original investment price, but nearly all of them are already underwater on that investment. Many will see their homes languishing in bankruptcy actions monitored by banks that will also be trying to get a price close to what was loaned — although that is just as much of an uphill struggle as would be trying to sell at 2005 prices.

2. Those very unfortunate people who bought in 2004 or 2005, right when home prices hit their peaks, and who have to sell now because their mortgage has increased beyond their means, or because they are having to relocate to another city. Some of these people can sell their homes below cost and cover the losses with their future earnings, since many of them are gainfully employed.

3. People who have held their homes for several years, and who, when selling at 2003 or 2004 prices, will still see a huge return on their home because of the unprecedented increase in home values from 1998 through 2005. Their homes won’t be selling at what a couple of neighbors might have gotten at the very peak — only a couple of people got those highest prices, and most of them turned around and paid peak prices for another home, thus, gaining virtually nothing for their timing. But you can still sell your home for far more than if you would have sold it five years ago.

The question facing you, especially if you would like to make a change in your life, is whether selling into this difficult housing market will be more or less costly than selling into whatever the housing market will be like in two or three years. Looking at the ever increasing amount of inventory, there are very few realtors who are saying, “I’d wait until next year because I believe prices are going to go back up.”

The long-term forecast for most of the country is partly cloudy. In AOL’s Money & Finance report, Ingo Winzer, president of The Local Market Monitor LLC, makes this outlook for Chicago:

Above-average home prices and the modest state of the local economy will result in slower price increases in the future.

The AOL Money & Finance forecast isn’t much different in other major cities like Baltimore, Boston, Detroit, Denver, Kansas City, Miami, Philadelphia, Washington D.C.

In other words, don’t expect the kind of gains we’ve seen on residential real estate in the past. It’s always a tough decision to sell your house. But those folks who win, whether they sell now or sell later, are in a much better position than the people who got caught up in the excitement two years ago only to discover there is no way to get out at the price they paid to step into the market.

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