Falling prices boosting sales of existing homes

We've certainly been seeing this trend here in California, and now it appears it's also gone national: as prices plummet, home buyers (many investors hoping to hold on and rent homes out for cash flow) rush into the market. So does that potend a bottom or is this market still feeding on itself? From a Wall Street Journal story:

Home resales rose 5.1% to a 4.72 million annual rate from 4.49 million in January, the National Association of Realtors said Monday. About 45% were foreclosure and short sales.

The large number of these distressed property sales is driving prices lower. The median price for an existing home fell 15.5% last month to $165,400. Falling prices depress demand, contributing to the high inventory that is a factor keeping prices down. Inventories of previously owned homes rose 5.2% at the end of February to 3.8 million available for sale, which represented a supply of 9.7 months at the current sales pace...