Steve - I would work the problem backwards, the best time to buy is when you are ready to buy. Start off by looking at your financial stability, job security, saving ect. If your financially ready to make a long term commitment to buying a home, now is a very good time to buy a house, as the market has pulled back very far. If you are asking is the bottom no one know the answer to that question. A few things you have going for you, high inventory plenty of houses to choose from, very low interest rates and only the best agents are still in the business, best of luck to you.

Hello Steve,
It is never to early to be proactive in planning where to live. Our homes and where we live are one of the most vital components of how we function. Because it tends to shape how we feel and our finances are always involved, it is one of our basic needs that must be adequately addressed before we truly feel at ease with the rest of our lives. It will make you feel better to start gathering all the information you need. Although you may not be ready to commit right now, the better educated you become on your local market and the more you figure out your personal finances, you'll soon feel ready to commit. Best of Luck!

Dear Steve,
It is always recommended that you start shopping as soon as possible. Trulia, offers the stats and trends for the areas you are interested in and it will give you a general idea of the market value. Also you can set a automatic search for homes that interest you with a real estate agent client gateway.(It is a free service) or go to the link below and ask the "retriever" from Coldwell Banker to fetch you properties
you will get an email every time there is a new listing on the market that matches your criteria.

If you need further info, please feel free to e-mail me or call me at your convenience.

Steve - If I were you, I would start now by getting my financing in order, finding a good buyer agent, and refining my selection criteria. I would also determine what it would take to break the lease. Explain to your agent that you will want to move next summer. Spend a little time this summer/autumn - when you don't have to deal with snow and slush - looking at a FEW homes you like in your price range to clarify your needs and desires. If you go to open houses, take some of your Realtor's cards, and hand them to the agent at the open. Don't try to look at everything - just get an idea. If you happen across a home you love and can justify breaking your lease to buy now, have your agent write an offer. Otherwise, start serious looking EARLY in 2009. Consider that short sales generally are riskier and need more time; and that banks want quick closings on fully foreclosed properties. Best of luck - and enjoy the process!

Given the availability of information online I'd say "now" is a good time to start your search. You definitely have plenty of time to gather information and gain an understanding of the local market. You will want to get a little more serious about your search as you get into February or March of 2009.
Are you planning on working with a Realtor? If so, I'd suggest getting in touch with them soon. You have plenty of time but there are a lot of things to consider and learn in the process. With a 1 year time frame you will be able to get very comfortable with the process. A great tool available to the local Realtors is the "email update" function of our MLS. Basically, you provide your search criteria (price, size, neighborhood, etc) and you will start to receive emails of new listings that fit your criteria as they come on the market. This is an easy way to start to learn the market.
Let me know if you'd like more info and good luck!