Buyer's who plan to stay in their properties for a number of years are at an advantage if they buy before the market finds its "bottom." Here's the caveat: think local.
Some towns have a ways to go to reach that point. Other markets, like Cambridge, are buzzing along again. In fact, we're seeing a shortage rather than a glut of certain kinds of property. There are so many buyers looking for three bedroom condos and singles above a million in Cambridge that the supply of listings just isn't enough.
In either case, the winning strategy for buyers is somewhat counter-intuitive. DO buy while prices are falling. Your bargaining power is greatest when sellers are uncertain about when and if home prices will reach bottom. Once the market hits bottom, you'll find it harder to get a seller to make concessions.
Here's an article from the Boston Globe that explains it all.