I was reading a post recently on MSN and I saw one post that made a very clear statement regarding the decision of whether to buy in to days market I had to pass it on:
"The real estate market is so unpredictable that it is hard to say whether you should buy or wait. For this reason, the best advice in any market is to buy when you have a reason to buy. Waiting to save a larger down payment is a good idea and you also do not want to settle for something you do not like. At the same time, take a look at your current situation. Do you plan on making more money in the future then you do now? Or do you only predict a slight annual increase? Unless you foresee a lot more money coming your way in the future, it may be a good idea to buy now and work your way up. Keep in mind that this doesn't have to be your dream house, you can just use it as a stepping stone to get to the dream house. Another thing to remember is that you receive tax benefits for owning a home."