Of course I can only speak for my area of operation, but there are a few things to look at to answer your question in general, but it is ultimately up to you to make this decision in any market.
First, the interest rates are low. Iâ€™ve always felt that anything below 7% is good. Now weâ€™re flirting with 5% and lower. Second, the inventory is high, but that wonâ€™t last. This time in Dayton, Ohio the inventory was 13 months and that is now down to 10 or 9 months. Finally, price reductions are finally taking place. The seller is coming to terms that their home is not worth what it was in 2005.
Here are the challenges to your question: The interest rates may fall even further, the prices may fall further and the choices may be greater. I canâ€™t say that this is not true, but how will we know? We will know when the interest rates prices stop falling and start to climb back up, when the price of new listings start to climb back up and when the inventory begins to shrink. What Iâ€™m trying to say is if you wait for the most perfect time, you will watch it pass you buy because the only way to know when the ball hits the bottom is after it is on the way back up. Letâ€™s say you are waiting for the price of a specific home to drop to its ultimate low price. Some one else wonâ€™t wait and youâ€™ll loose that house. Thatâ€™s okay. Youâ€™ll just find one like it, but now the prices have bottomed out and now the market is turning so the interest rates will begin to climb. In the end if you wait to buy, you run a chance of paying the same because you missed the bottom and now the interest rates are higher than you would have gotten if you bought on this side of the trough.
Even though the prices may drop further, and I donâ€™t think they will by very much, itâ€™s still the best time to buy right now.... more