Right now you probably read that title and thought "What is he talking about?"  Please allow me to explain. 

Picture this:  You're sitting there, watching your favorite movie on the TV and you think, "I want some popcorn."  So what do you do?  Like most Americans, you go to the cupboard and grab a bag of your favorite brand of microwave popcorn.  Now, if you are like me, your microwave may not have one of those buttons labeled "POPCORN," so you read the directions on the package, which always has words to the effect of, "Time varies according to the power of the microwave.  To tell if your popping corn is finished wait until you hear 2-3 seconds between pops." 

Therein lies the little test of your moral character.  Are you a risk taker, or someone who likes to play it safe?  If you are a risk taker you wait and wait at the risk of burning the whole bag in hopes of getting more popcorn to pop, after all, you did pay for it so why not get as much for your money as possible?  If you like to play it safe you wait and the first time you can count," one thousand one, one thousand two" you stop the microwave because even though you may not get quite as much as if you waited, at least this way there is no chance you could ruin the whole thing.

Now to the application.  Many of us when contemplating a real estate transaction do exactly the same thing.  We either want to wait until the market "bottoms out" or buy now because we know for sure that we are getting the best deal we could today.  Which is the better course of action?  It really depends on you.  You see, not even the most experienced real estate investor in the world can tell you exactly when and how the market will ebb and flow.  They guess.  Some of their guesses are very educated, but they are just that, guesses. 

If you want to wait until the market gets to the lowest point there is a good chance you'll miss it.  Which makes you a greater risk taker in reality than someone who buys today.  Why?  Because the only way we can tell the for sure is by looking back in hindsight, once prices rise again.  Which means by the time most people know the market "bottomed" they already missed it.  The whole bag may just have been burnt.

If you are a person who less of a risk taker, you buy now with the knowledge that prices may drop a little more, but at least you got in before they went up. Also you know that overall in the real estate game while the market does ebb and flow, values tend to rise over time.  So you get in early to avoid burning the bag and losing it all.  

That my friends is the psychology behind any waiting game, beit microwave popcorn, home sales, or poker.  I hope this helps you in your contemplation of your next move in this current real estate market.