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It is most definitely a ‘buyers’ market. Foreclosures constitute a huge percentage of the current sales trend. I’m doing a BPO now for a property in a small town and in the previous 6 month sales period, 50% were foreclosures. Stunning really.

Disgusted is what we should be; not ashamed.

It may be a 'buyer's market, but the evidence is that the market is still going down. Gary Shiller (of the Case-Shiller Index) expects prices to drop another 20% (though there will be regional variations) - we haven't even begun to fully work through the backlog of REO and foreclosures, let alone the the loans underwater, but still performing. (And, 2011 is the year when a lot of the commercial real estate will need to be refinanced). Shiller doesn't expect to see prices turn around for another 3-4 years.

At some point, sellers still unrealistic expectations will give way and there will be a big fall, perhaps even an overreaction (as is typical when bubbles pop). Remember, mortgage rates for those who still qualify remain artificially low, and as inflation heats up, as it now is, borrowing costs will increases, reducing buyers' purchasing power, and hence, prices.

Some observers think prices could drop to 1987 levels (although, 1987 was itself a bit of a bubble year.....).

I guessing that most people looking to buy in the long term would be better off renting in the short run and saving money to buy when prices drop another 15-20%. Few people will perfectly time the bottom, but it's not really time to buy yet.