I want to buy a house. What should I do?
If you want to buy a condo, then wait a few more years. Then start looking for deals. There is no point trying to time the bottom, as real estate prices will not start going up for several years once the bottom is reached; so there is zero upside to buying early. By 2015 you'll be able to get luxury downtown/beach condos for $150 per square foot, and condos in nice/safe areas away from downtown/beach for $75 per square foot. Condos in borderline sketchy areas and sketchy areas will become low-income housing, so don't buy in at any price. Condo prices will overshoot on the downside - have the cash ready and learn how to find the best deals from desperate sellers; that way you may be able to get luxury downtown/beach condo deals for under $100/square foot and regular condos in nice areas for under $50/square foot. Be patient and start looking for deals in a few years.If you want to buy a house, then stay away from new developments, particularly far-away new developments. New developments will be junk (like in literal junk)/borderline junk in a few years. At some point (probably around 2015) there will be investment opportunities to get 2002-2007 new developments at 5-20 cents on a dollar if you want to play that game. But paying even $50K for a poorly-build McMansion in a far-away subdivision is far from a safe investment.
Your best bet is to buy land in a good area (not far away junk) at 5-20 cents on a dollar, then build a high-quality smaller home.
Land prices already declined by 50%+ in many areas, and in Florida they are down as much as 80% (at the end of 2007). Land will decline further. By 2009 you will be able to buy land in many nice areas for 80%+ off 2006 price. So start by buying land for $10K-$60K (the identical plot in the same area was $50K-$300K in 2006).
Home builders are starting to starve. Up till 2006 home-builders were super-busy and quality roofers, plumbers, etc were making $50-$75/hour or more. By 2007 in Florida many can not find work for even $10/hour. Building materials are going down in price as well. Lumber prices for example have dropped from a 2004 peak near $500 per 1,000 board feet to about $200 in early 2008 - a 60 percent reduction in price.
If McMansion with overpriced labor and overpriced materials was $300K to build in 2004-2006, a smaller home in a few years will be $75K-$100K to build. Building materials will drop in price by half and labor costs will decrease by 50%-75%. Plus the quality of construction will be much higher since you'll be able to hire much better quality workers who will not be rushed.
So, buy land for $10K-$60K, then build a smaller/better quality home for $75K-$100K. You may be able to do that as early as 2009.
Another option is to wait for prices of nice homes in older/nicer/established areas to drop. But the bottom for older neighborhoods will not happen for many more years, so you'll have to wait for at least five more years for that.