Should I buy now or should I wait to see if prices come down?

My answer would be to buy when the timing is right for you rather than trying to time the market. In the summer of 2001, I remember all the talk of the bubble bursting in Long Beach, CA. People that decided to wait for that occurrence ended up having to pay a lot more. A lot of sellers sold their properties back then as they thought the top had been reached. They lost out on hundreds of thousands of dollars of appreciation. The point is that even the experts can't predict what the Lake Havasu City market will do in the next six months. Many of them do agree though that the super low current interest rates won't last forever. Suppose you are a buyer and you want to hold off buying now in hopes of the selling prices getting lower. If you went ahead and bought a $300,000 home now and got a 90% thirty year fixed rate loan of $270,000 at 6.5%, then your monthly principal and interest payment would be about $1,707. Now suppose you think the prices may go down and you hold off on buying your dream home. Say the selling price of the home does go down and has now dropped 5% to $285,000 but the interest rates have gone up to 7%. Now your payment is $1,707. Wait a minute, that's the same payment you would have had if you bought it at $300,000 and got it for 6.5%. What if the home didn't drop 5% but instead went up 5% plus the interest rate is now 7%? The same house would now sell for $315,000. Your 90% loan ($283,500) at 7% would have a payment of about $1,886 ($179 per month more than buying it at $300,000 at 6.5%).You get the idea plus if you are presently renting, you have collected several more rent checks (with no tax benefits) while trying to time the market.

Sellers: The above scenarios could apply to you also as you are probably going to buy something else when you sell.