Personally I am pessimistic as well. I believe that the annual figures that discuss year over year statistics do not bear out how really tough it is. I think John Hokkanens post about months of inventory is particularly accurate. Lagging indicators (in my opinion) are indicators that do not accurately reflect what is happening on the market. For instance the July year over year numbers just came out. The San Diego county numbers reflected the median price as being down 1.8% from July 2005. However sales are down over 30%. Also think about it. July sales mean that the properties went into escrow back in May or June…. Essentially the market is much worse then that. So not only is the median price a lagging indicator it is essentially innaccurate.

Your idea about submitting lowball offers is not a bad idea. Expect most people to decline. However ALL IT TAKES IS 1 to be accepted. I liked Powaysellers strategy. Even though she broke my heart and mentioned that other agent… (j/k PS)

Seriously though, I would really try to exercise patience if I were you. While you will get a good deal with the manner you plan to operate under, I believe the simple risk verses reward plays out for you to wait. The risk that the prices will go up again is quite low compared to the reward that you could realize.

I believe the return on something as simple as a CD will by far outperform housing appreciation over the next few years. I really believe it is a no brainer.