You should buy a house, when you are ready, don't try and "time" the market. As long as you can afford the payments and you like your location its much better than the alternative in renting. Now a days you have cheap money and a major real estate correction coupled with each other.
You are ready to buy when you have decent credit, a down payment and the ability to pay the mortgage on time on a monthly basis. You get mortgage interest to write off, equity for your future and possibly a nice tax credit for the 2009 year.
I hear people screaming that we are at the bottom (typically Realtors) and other screaming that its gonna pull back another 50% (buyers / small time investors). The underlying principle is that no one, I mean no one knows what they are talking about. The smartest economists, money managers, financial gurus don't seem to know anything or we wouldn't be in this recession we are in now. Your house isn't like owning stock certificates, its tangible and will always be there. If the value of your home goes down a little over time, who cares because it will go back up over time. You cant make more land in NYC but more and more people come here every day of the week.
Whats the problem with your house search, are you unable to find a house that meets your criteria?
Goto my website, I am primarily a developer. I buy houses that need extensive repairs and modernize them into 2009 living.