You should speak to a local Realtor, someone who has knowledge of the area.
As you know, the real estate market has been in a protracted downturn. There are opinions in the press on when the national market will turn with home values overall and sales trending higher. Usually the press tracks the 25 to 40 largest metropolitan markets. While there is a considerable amount of information available, for practical purposes, the information is not useful from one market to the next. Over here in Boulder County, the local economies offer different and sometimes contrasting stories. And for a host of reasons, the city of Boulder has fared better than most of the nation, including most of Denver.
Timing the market would be extremely difficult in any case. The upshot: You should consult a knowledgeable professional, most likely your local agent.
A sensible approach offered by others here: You should look at whether you are ready to enter the market and act when your situation and "the right house for you" line up.
My advice for buyers who want to get their ducks in a row:
1) Examine your credit. Contact the credit tracking agencies to see if there are any mistakes on your history. And you might want to read up on improving your credit profile. Experian, Trans Union and Equifax are the three reporting agencies.
2) Get your financing lined up beginning with a pre-qualification letter from a lender. This will help save you a lot of time before you begin working with a real estate professional. It is very important to know how much house you can afford before you put in any footwork.
3) Look for a neighborhood that meets your needs. Look at schools, shopping, fire protection and similar considerations. In smaller markets, there may be few choices. But, in metro areas, there are considerable differences.
4) Determine whether you would be happy living in an HOA neighborhood. If you are unfamiliar with HOA living, you should speak to people who live in these communities to get feedback. Go online and familiarize yourself with the covenants. The financial condition of the HOA is important, too.
5) Start shopping online.
6) Hire a good Realtor who will represent your interests as a buyer. If you are new to buying, you want someone who can give you an assist with everything from locating bargains to negotiating a contract. Notice, I didn't say price. Price is but one aspect of many real estate deals.
If you're considering these questions now and you haven't done your due diligence, you might not even be ready to act for months.
BTW: I like that part of the state. Very rugged in some places, very accessible in others and all quite gorgeous. I wish you the very best.