Overpriced is a subjective term. You may think something is not overpriced and I may think it is. I may be wrong, but I'm in no rush to be right and jump into buying.
I am pre-approved and have over a 25% down payment saved for the price range I'm looking at. If I find the right hope at the right price, I would be wiling to move today.
But my opinion of what the right price is will clearly not match yours Damian. For example 215 Harvard Ave Townhouse like condos would have to drop to ~$300k for me to say they are priced right (mostly because of the darn pillars in every room that make the rooms virtually impossible to use efficiently. Or the Amaranth Condos...the last few units left would have to be around $400k for me to think they are priced right. Mostly because their location is much worse for me than 215 Harvard and I didn't think they were particularly well lit when I saw them. Though I don't know if there are any units left at Amaranth since I think one of the two last ones sold for 460 which in my opinion is as I said 60k more than I'd be willing to pay for it.
Since I have a positive savings rate and a sizeable down payment, higher interest rates are actually better for me. For every point the rate increases, prices would have to go down 10% to have the same monthly payment. If that happens, I'd actually be paying less than with low interest rates b/c of my savings/positive cash flow. I know that analysis is basic but I don't really want to debate all of the variables that go into it.
I am a first time buyer, but I'm not worried about the credit expiring. To me, if the credit is the only reason people are buying, they are doing it for the wrong reasons and if that is the case, after the credit is gone, there will be nothing stimulating new purchases and prices will resume their fall.