Interesting discussion.

I expect they will fall slightly further, but not much, i'd say base price to be £5-£6k in a year or two, there are some mega cheap ones about, but also still some expensive ones, if you go on BMW main page some dealers are still selling good ones at dealerships for £17k, more expensive than some E60 M5's.
You have to look at E34's as well, you can get a half decent one for say less than £3.5k-£4k.
Only trouble with E39's is that they are such great and reliable cars that most of them all have spaceship miles.

I found a facelift black one on Gumtree yesterday that seemed like a genuine ad, it only had 68k miles and FSH, and it was DIRT cheap! if you buy the right car you won't lose much on it, other than the thousands of pounds in petrol you'll use.....