In her California inventory is also low, I guess it depends on why you are selling and what is happening in your neighborhood. If you have lived there for at least 5 out of the last 8 years you may qualify for the $6500 but time is important for that credit at this point. I also bring up another good reason why it makes more sense to move now than later analyzing the prices when the market changes more. However this is based on your reason for moving.
Here is a link to my blog http://www.trulia.com/blog/dianne_hicks/2009/12/6500_dollar_
In Phoenix area the inventory is low! My buyers are making mulitple offers on multiple homes before getting accepted. Also the home buyers credit is motivating some home sellers to sell their homes!
If your home is priced well it can be a great time to sell! There are many factors that will affect your time to sell, such as loans on your home and how long ago you purchased your home!
If you would like a market analysis feel free to contact me!
There's also no way of knowing if housing prices are going to go up next year in your area. The market determines the price of a home so it is dependent on what happens in your local real estate market.