Can you really time the real estate market?

During the apex of the boom years, many sellers did their best to time the market in order to get their chips off the table and wait for the bottom to get back in. For both buyers and sellers, timing the market is always risky, although given the size of the run-up in prices during the boom, it's hard to fault those sellers who saw a bust coming and didn't want to lose even paper money. So how can one time the right time to re-enter the market? From a story by Peter Hong in the L.A. Times:

Just as experts couldn't precisely time the bursting of the housing bubble, no one claims to know exactly when the market will hit its bottom.

There are plenty of pundits weighing in with predictions on when the housing crisis will end, but knowing what to do is tougher than knowing what to say. For those who sold homes during the bubble, actions can be as telling as words...

Declining prices are driving home sales up over last year's levels in Southern California and statewide. Nationally, sales are still below year-earlier levels but have been inching up...

In Southern California, sales are brisk for homes priced near or below the current $265,000 median. The majority of those homes are foreclosures, so prices are often low enough to draw multiple offers from potential buyers.

Richard Toscano, who in 2004 started a popular San Diego housing-bubble blog called Piggington's Econo-Almanac, lately has been posting data showing home prices are favorable compared with incomes and rents in lower-priced parts of San Diego.

He's drawn fire from some, but others who have followed the blog for years have recently posted comments detailing home purchases. Toscano, who sold his San Diego condominium in 2002 (he said the sale was due more to a job transfer than his belief in a bubble then), is still holding off on buying for various personal reasons, he said.

But he thinks it's no longer dangerous to buy in some areas.

"We have this weird, disparate bottoming," he said. "In some areas we may be there already, but others are not nearly as close."...

As prices continue to fall at the high end and those homeowners get deeper underwater, they'll have to sell at prices well below today's levels, or get foreclosed on, which will result in the homes being resold by lenders at cut rates.