Postponing a purchase for a "lower price deal" costs more money than one might gain if one ever did find a mispriced home. That said, trees (and Gamestop shares) do not grow to the sky. There will be a leveling of prices at some point.
One of the drags on price appreciation that may occur? 2020 income for the Self-Employed, for the Bonus driven earners, and those with fluctuating hours is (for now...) going to suppress qualifying income. Example:
Universal Underwriting Guidelines ask for SE, Bonus, and Hourly/Variable income to be averaged over the past 2 years. I have a customer who in 2018 and 2019 earned $100kpy but as variable income (Nurse). She has a new job in 2021 that will pay $100kpy - also variable income. In 2020, her income was $50k, plus Unemployment due to the shutdowns. An Underwriter today cannot consider a 3 year average of income for qualifying income ($100k - 2018, $100k - 2019, $50k 2020 = $6,900 income) , The Underwriting standards today cannot "forget 2020 existed" or use temporary unemployment as income. They cannot use 2018-2019 and the "promise" of 2021 future income ($8,333 per month average). They must use 2019 and 2020 income, averaged over 24 months - about $6,250 per month.
Same for base/bonus income. A person's base might be $100kpy, but bonus income may be $36k year in, year out. If there was a $36k 2019 bonus paid in 2020, but the 2020 bonus payable in 2021 is nothing, Underwriters today must use the lower of two bonus payments as the expected bonus income - which is zero. A $3,000 income reduction will prevent some buyers from moving ahead with a purchase at present prices.
This is easily solved with income qualifying rule changes by the Government backed Agencies, FHA/VA and the Fed for bank lending. "Government change" and "easily solved" are two phrases that rarely coexist. Because of the current underwriting standards a large pool of first and move up buyers will be prevented from taking on new housing in 2021 and perhaps beyond. Fewer buyers can mean less competition for homes. Less competition can lead to flat prices.