Hi Interrupted Hour,
One thing that has not yet been mentioned is that even in areas that have declining prices, there is strong demand in certain market segments. For example, if you are looking for a 2 bed and 2 bath condo in the under $400,000 range you would have a lot of other people looking with you. That means there is ample demand in this market segment. You should also be aware that in many cases people are pricing their homes better now than they did a year ago. That means that they are pricing low enough to attract many buyers who realize that the property is under market and are therefore willing to bid it up.
Many buyers that I have recently worked with have initially come to me saying that they want to offer 20% less than the asking on any property. This requires me to educate them on how things work and the impact of other buyers in the market. After this discussion, my buyers understand that you canâ€™t make a statement like that and apply it everywhere. You need to evaluate each home that you are interested in and determine what other buyers in the market are willing to pay and then decide if you are willing to pay that too.
If you continue to focus on finding properties that are listed way under what they should be, then you should expect that they may get bid up and prepare for such an event. I would not simply drop out of the market and wait, because if you are buying long term, then it is never a bad time to buy. Secondly, the lower higher conforming limits and lower short-term interest rates will eventually increase 30-year fixed rate loans and bid up the prices of homes. How long this will take is the question of the year, but it will eventually happen.
I wish you luck in your search and must agree with some of the statements in the previous posts. You must have someone on your side helping you. In our market, the seller pays the commission and having an agent represent you means that the listing agent gets the total commission, so how does that help you?