You might want to look at Westchester,particularly near LMU. There is a high demand for rentals in that area, by the students from Loyolla. All prices are down now and interest rates are low. If you add that to the first time homebuyer credits, you can get a very good deal right now.
You might want to consider the Palms/Mar Vista or Hancock Park/Mid Wilshire area for condos in this price range. There are some foreclosures and regular sales around $300K and under for 2 bedrooms and 2 baths and these locations are central, nice areas for other potential renters.
When is a good time to buy? That's a great question. My philosophy is: if you find a place that works great for you and you're comfortable with the payments, consider purchasing! We won't know when the bottom of the market is until it's already going back up. There are a lot of great deals out there that I know about.
Keller Williams Realty