The answer is that its impossible to know exactly when the National Real Estate market will bottom. Some say 2009 and other not until 2010. It will slightly different in each local market, and we won't know until we are way past the bottom that it is actually in place.
However, for savvy buyers who want a deal, now could certainly be the time. Pricing in Litchfield County is far from efficient. I sold a the highest sale in Roxbury in 2008 last February. He paid less than half of the original offering price of $7.5mil. The owner turned down offers in the $5mil range along the way. My client got such a good deal, there is no doubt that he got the bottom pricing, even though it was a year ago! I don't care if the market goes down another 20% from this level, my buyer would never have to sell this house for less than what he paid.
Similarly, I sold one of the highest sales in New Milford last August, that's right only one month before the meltdown. This house had been on the market for more than 5 years. Again, this buyer was able to negotiate an incredible deal, one which will hold up in any market!
By the same token, I am aware of another broker's deal that was recently done in Washington where I am firmly convinced the buyer got screwed, even though the deal closed in December and he knew what the market was doing!
The point I am trying to make is that you can make a good deal or a bad deal in any market. I just searched inventory between $2mil and $3.5mil for a buyer. I am astounded at the pricing variation. There are houses in the group which are 30-40% overpriced, and there are houses in the group which are fairly priced for today's market. You will need professional advice to sort this out! If you want a great deal right now, they are available. However, you will not find them by siting in NYC searching websites and telling your broker that prices are not stable yet. If you want a deal, you need to make a commitment to coming up several weekends in a row, getting familiar with the inventory, talking to your broker about which sellers are motivated, and submitting bids where you feel comfortable. A few sellers might not negotiate, they might even be rude and tell you to take a hike. Who cares? You don't know them anyway! If you are sensitive about this, bid under a lawyer's name. Its done all the time, and then the seller will have no idea who you are if things don't work out. Most smart sellers will negotiate any offers in this market. So come up and get your DEAL!
Even though the current economyis ugly, Spring is GORGEOUS in Litchfield County, and just around the corner!