It’s going to be slightly tough to know if and when a longer term bottom is in, but we know there was a flurry of activity late in the year last year. If YoY prices and sales are in line with Sept-Nov 2009 you might be able to be somewhat confident the market is standing on it’s own two feet. Last year you had a flurry of tax credit and pent up demand buying, so this year will likely see less sales but if prices hold up and the sales don’t drop too much then it might be worth taking a plunge.
Personally I just don’t see the huge V for housing prices in the next 4-5 years. I don’t see the buy now or your going to be left behind on 20% a year gain in 2011, 2012, etc. I would buy for the right reason, a place to live, not trying to time the exact bottom right before 10% a year appreciation. It’s unlikely housing is ever going to the investment vehicle it was in early 2000. It’s just doubtful you’ll see the leverage that was required to produce those annual returns ever again. Housing will go up with wages.