If you "must " buy, then I hope you have a long time frame reference (eg. 5+years). If not, I would seriously consider renting as when you factor in the costs of purchase, closing, land transfer, legal, r/e commissions, HST if new and closing after I believe July 1, 2010, etc. that is alot of ground to make up even if there is no price dip and one senses more and more gloom creeping in. Unfortunately, this is often a self fulfilling profecy.
I have said in other areas I believe that a retest of the lows of 2008-9 or 2007 prices may be a good guess (or between 10-20% off present prices). I am not one of the "doom and gloom posters". I believe however that the world looks no better now than it did just prior to the last peak and yet prices are higher. In fact, I would argue before the crisis things looked downright rosey and prices were 5-10% below where they are today. that said, prices today are still at highs but increasing inventories and products will inevitably stave off further increases and probably result in some decreases.
More concretely, if downtown is averaging $500-600/ foot for new product and say $400-500 for resale, I would look to spend$450-$550 max for new product (the lower the better) and good quality resale $350-$450. I don't believe you will find much "new" product at this range below this because it will take people some time to adjust to the downward influence on prices.
People seem to have no trouble accepting a $50/sq. ft rise in price over a year and thinking it will go to a $100 increase next year but when they look to sell, the same people will not accept a $50 price drop and will stubbornly think in terms of where prices were rather than were they are going to adjust downwards and hence tend to hold out and watch as their investment deteriorates but stubbornly will not sell for fear that it "may reverse".
Just my thoughts "onfence". I would look at assignments but ask for weak/motivated sellers. There are a number of people with I am guessing who are spread thin and with small down payments who would love to get out with some profit but less than todays asking prices. As the market halts, the incentive for reasonableness on the part of sellers will become more obvious. I personally would hold off as long as possible but I appreciate sometimes one "must" purchase.
Hope this is of some help.
