Take a look at the tax credit for home buyers. http://www.federalhousingtaxcredit.com/. This is the relief that YOU as the buyer would want.
It talks about "aspiring home owners who find their goal stubbornly elusive. The newly enacted legislation providing a tax credit of as much as $7,500 for first-time home buyers might just be the opportunity of a lifetime.
Like so many of the good things in life, time is of the essence for buyers who want to take advantage of this outstanding opportunity. Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible."
Trying to time the market is an extremely difficult thing to do. We all know we should buy low, sell high. But the only time we really know where the bottom is, is almost 6 months later when the upswing has already happened.
What you should focus on is what you are comfortable doing, what programs and incentives are available. Even if prices should fall --- and right now, they're practically at 2003 levels which is the height of the buying frenzy --- the interest rates are starting to rise. So how will you compute how much you save by waiting? If you buy after July 1 2009, you won't be eligible for the tax credit. And who knows where the interest rates will be in one year?
If you find a home that you believe is a good and fair value, and you have a good loan program, consider testing the market after you and your realtor determine the current market comps and trends.