In this good news, bad news economic climate, it's tough to tell where real estate is headed over the next few years, said panelists at the 2010 REALTORS® Midyear Legislative Meetings & Expo on Tuesday. The panelists spoke at the town hall-style session during the second-annual Real Estate Summit.

On one hand, the market has steadied to the point at which the industry can finally start to get its bearings. We're still in a very tough time in the market, but for the first time, we can size up the problem, said Patricia Caldwell, chief of the Homeownership Preservation Office, Department of the Treasury.

We had to restart the markets again, said J. Lennox Scott, president and CEO, John L. Scott Real Estate, a Pacific Northwest brokerage with more than 3,200 associates. It worked, but now we have to look at the end result we want.

Still, no one was willing to call the end of the real estate downturn.

The real estate problem is ... the result of a massive and unprecedented bubble, said James Glassman, a conservative commentator and former Undersecretary of State for Public Diplomacy under President George W. Bush. At this point, I don't think we've gotten to the bottom yet. I think we'll be paying for a lot of the things we've done to avoid catastrophe.

I'm not quite ready to say it's recovering, because the market is still on life support, and we're pulling out some of the tubes, said Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University, referring to the end of the federal home buyer tax credit and the Fed's program to purchase mortgage-backed securities. He added that the signs of a real, lasting recovery would be stabilizing delinquencies and prices.

So what can be done at this point to sustain the nascent resurgence of real estate? The panelists offered a few ideas for improvement. Scott said getting H.R. 5072, the mortgage insurance bill being pushed by FHA Commissioner David Stevens, would help, as would permanently raising loan limits and implementing and funding states' downpayment assistance programs.

Also, negativity prevalent in the media and the public consciousness needs to be countered, said Alfred DelliBovi, president and CEO of the Federal Home Loan Bank of New York. We're used to quick recoveries, DelliBovi said. But we're almost two years removed from this once-in-a-lifetime event, and we're still talking about it.

Perhaps the most important thing, though, is to shake out the new rules and roles within the mortgage financing space, the panelists said. Accomplishing this comes down to finding the right balance between the free-market system and government facilitation, an issue that's top-of-mind for Caldwell right now. One of the things we're committed to at Treasury is stabilizing prices, she said, but the department's long-term goal is to let markets stand on their own. We're pulling back on some of those [stimulus programs] when necessary, she said.