The real estate boom-and-bust cycle is still on the way down but it is not yet the time to buy (at least not in Seattle). The time to buy will be when the rent you can get, every month, for a property is 1% of the price you pay for the property. For instance, if you buy a condo for $250,000 you must get a rent of $2,500. If you stick as closely as possible to this "golden rule" greed will not suck you into dangerous speculation that has caused many people to lose their shirts recently. For more details on how to run the numbers see my book "How to Invest in Condominiums."
Update of real estate bubble - February 12, 2009:
In Seattle in the late 1970's you could buy new condominiums for a price that was about seven times the gross annual rent. I stopped buying real estate in the 1980's when I could not get a price close to my recommended target price of seven times the gross annual rent. In Seattle today you can't buy a quality condominium for anything even close to a price that is seven times the gross annual rent. We are a long way from the kind of bottom in real estate we had in the late 1970's. But a temporary false bottom could be forming.