I just looked at homes out there... would you like to share some data points? Mike

I'm assuming that you are buying a new house from one of the builders. Unless your contract has an option for (re)negotiating the price, you might have a hard time to re-negotiate with the builder. If the builder is not open to renegotiate the price and you decide/threaten to backout, there is a likelyhood that you will lose your deposit. My friend had signed a contract for a new house last July. Seeing the sub-prime meltdown and the troubles in the banking industry, he went to the builder and asked to re-neogtiate the price. But the builder was reluctant and did not want to reduce the price even after he told the builder that he wanted to backout of the contract. Since his deposit was not huge, he decided that it made sense to lose the deposit rather than buy a house which was definitely going to lose value. But luckily for him, the builder refunded his deposit (although the contract had mentioned that he will not get it back). Fast Forward 6 months...the builder finally sold that house for 10% less. By the way, this was not in San Ramon, but in a city which is/was already seeing huge housing problems.

Maybe you can give some hints to the builder to guage whether they are open to renegotiate the price and then decide whether to wait till Sep or start the process sooner/later. In my opinion it makes sense for the builder to renegotiate with you, because if you backout, they will anyways have to sell the house for lesser than your original price.
Good luck with your renegotiation.

your "out" may be the appraisal. If the homes does not appraise, your lender will not fund the loan. You will have the opportunity to renegotiate once the appraisal is in house. (You did not use the builders lender did you?)

I'm not sure I understand the question. "Closer to escrow": do you mean closing escrow? If so, have you already signed a real estate contract to purchase? If all parties have signed then you have a legally binding contract. Read the contract carefully to see if you have options to negotiate the terms of the contract.
If this is new home construction, is it totally custom or did you buy from a developer or a builder who is in charge of all or part of a new subdivision. Were you represented by an agent who can help and advise you or did you buy as an unrepresented buyer?
Your agent would have made sure to leave options for you in the contract; if you bought as an unrepresented buyer, the seller may not have left you any outs.
Good luck; please let us know what happens.

I'm not offended, Lenin. And I know where you are coming from. Just keep in mind, that there are other home buyers out there as knowledgeable as you believe it or not.

But thanks as that is good advice regarding the supervisor and negotiating.

Sorry, no offense. Just want to share my 2cent with other buyers.

If you wait within a month of closing and ask builder to cut your price, what you builder will react. The negotiation will take long time and must require supervisor's approval, they need time. I suggest you starting calling right now. Be polite and try to make friend with negotiator. The worst you can do is to make negotiator emotionally upset and act against you.

Do you have any backup plan if builder never agree?

Lenin, we knew this was a declining market in May. We aren't blind. We also knew that, although we were comfortable paying those prices, we would try to renegotiate if we could. So here we are and we just may be able to.

In a declining market, you will almost always be behind the curve. Who is going to sell you something for a price 6 months into the future? What if they did, and the price is even lower still when that 6 months rolls around?

My question remains - Is it more beneficial to wait until closer to escrow to renegotiate since there will be more comps and evidence that prices are lower by then?

Lenin - your I told you so and rear view mirror type answer isn't much value added.

Here is a perfect example of lessons we learned. In this down market, do not rush to a buy just because price is reasonable at that time. You have to look ahead 6 month or more and predict what the reasonable price will be by then. If you have read some great advises posted by Donald, you will wait until end of year to make that purchase.

Hope you will be successful on your negotiation. That will be a very tough job. Good luck.