I believe its a good time to buy IF you find something you love. Otherwise I thing the market has another 12 months of correcting for the bargains to start. If the market is slow this spring the fear will begin through the rest of the year. I may be wrong, but I don't see any fear driven selling yet.
The predictions are inconsistent. Go up this summer or 2008 take your choice.
Near us in Fallbrook the prices are up 4%, so what market are you talking about. There are many RE markets.
Earlier, I discussed a 595,000 overlooking the ocean. I don't think I'd wait on that.
The inventory is high, that you certainly won't risk much if you wait out 2007 or just watch month to month. Unless you don't own and you're paying a lot of income tax.