You can probably expect prices to come down more in the next year or two, although every market is a little different. Look at not only the trend in prices, but how long houses are sitting on the market. If houses are priced high but not selling, that's a good indication that the prices will have to come down.
I live in Wilmington, NC and I haven't noticed much of a drop in prices either, but I have noticed a huge drop in the number of sales. Since nobody is buying, it's causing sellers to be much more likely to negotiate with you...especially when their house has been on the market for a long time. The key is to find a house in which the seller is very motivated (such as a pre-foreclosure or someone that has already moved out and they are paying 2 house payments). One of the problems in Wilmington is prices appreciated so fast that many buyers (such as myself....and I earn a good salary) were priced out of the market. Until prices come down more, many buyers cannot buy.
I am also waiting because I know the longer I wait the lower prices will come down. I put an offer in on a house in May, and the sellers did me a favor by not negotiating with me (it was listed @ $175,000 - I offered approx $155,000 since it needed a new heating/air system). Since May similar houses in that same neighborhood are now listed around $165,000 and still not selling! The house I put an offer on is still not selling as well.
I'm going to keep waiting in anticipation of prices continuing to decline. In the meantime, renting is much cheaper for me anyway so I will be saving money and paying down debt. I will probably keep an eye on the market for a good deal to come up, but otherwise will be waiting to buy.
Just keep in mind interest rates on mortgage loans will probably go up a little. But you can always refinance when the rates go back down.