Realty Trac predicts that there will be 4.5 foreclosure filings in 2010. There were 2.8 million in 2009. This will place downward pressure on real estate prices - not good news for sellers. But my guess is that lenders will be so swamped, they will not be able to place the foreclosed homes on the market. They will have to spread them out into 2011.
But whatever happens, it is really a great time to buy - lower prices, very low interest rates (around 5%) and the new federal tax credit.