The price you pay for a home is only one factor in what it costs or doesn't cost you to buy/own a home.  Are you waiting for the "bottom" before you buy a home?  Here are a few facts to consider.

Interest rate.  Interest rates are at all time lows and are projected to stay that way for a while, but not long.  Is it a good idea to wait to get a lower price on a home or buy it now with a lower interest rate?

For example, if the interest rate goes from 6% to 6.25% on a $100,000 home the monthly payment increases from approximately $600 a month to approximately $615 a month ($15 a month or $180 a year). So paying 6.25% for a $100,000 home is similar to paying $102,500 at 6%.  In the meantime, while you might be waiting to get that lower purchase price, you may also miss out on the tax benefits to owning a home as the interest and property taxes you pay on a home are tax-deductible.

Timing.  The only time you can be sure when the "bottom" happened is after it has already happened. It wasn't until the very end of 2005 when we knew that the "top" happened during the summer of 2005, almost 6 months prior. The same will be true of when we hit the "bottom".  We will only know a few months after it is too late for a buyer to have the utmost in negotiating power with a seller. Spring and early summer of 2005, a seller still could get multiple offers. By fall and winter, multiple offers dwindled away and time on the market increased.

Selection.  Right now a buyer has many properties to choose and pick the best one for the best price. So right now, a buyer can get the biggest, newest, best located home for the same dollar as a house that might not offer as much. Once the market turns, choices will narrow.  Sure for the first part of the upswing from the bottom, a buyer will still have many homes to choose from, but not as many and there will be other buyers.

Pent up Demand.  There are many first time homebuyers, approved and ready to buy, but they are not buying because they are afraid.  They are looking, but have not acted.  Once this group goes over the tipping point, then inventory will start to go down.  Prices may not go up substantially right away, but the available choice will. Once a seller knows he has more than one interested buyer, he does not negotiate as easily.

As Warren Buffett said "In the business world, the rearview mirror is always clearer than the windshield. "