Excellent question! Let's call the psychic hot line. I wish I knew. I think the biggest factor is the interest rates. Our local economist uses 7-year rates to make his predictions. Here is the 10-year Treasury Note: http://www.forecasts.org/10yrT.htm
IF (as in capitalized if) oil prices come down to a reasonable level, AND food prices stabilize, AND we don't have any major economic catastrophes, AND depending on the price of rice in China, interest rates may stop rising, and possibly decrease. Every time oil prices jump, Mr. Bernanke at the Fed is under pressure to raise interest rates, because everyone has to spend money to pay for gas to get to work. Everyone is spending instead of saving. Banks have to pay more for deposits too. I think we are in an oil bubble now, but that's a sticky topic (sorry).
My point it that a 1% increase in rates will affect your buying power by between 5 and 10%. So, that $400,000 condo at 6% now with 20% down (~ $2100 per month), now costs 10% more 6 months from now with an interest rate of 7% (~ $2300/month) . Find a mortgage calculator and see:
On the other hand, more bad news in the housing market will cause more inventory backlog and prices will have to decrease, since less of us will qualify to buy! It's a big mess.
I always tell people the same thing when they ask me when they should buy: "When you can afford it."
Yes, you can wait and the rates may increase or you can buy now and the price of the home could decrease. Will home prices drop by 10% or will the rate go up by 1%? Call your agent as soon as you know, because I don't know. The interest rate is the big IF. Learn as much as you can about your local market. Talk to your friendly neighborhood Realtor. Get qualified by a loan officer. Be ready to move and when you feel comfortable, get your best deal.