I've only purchased one property, and that was in 2009, so I don't have anything but the recession to compare it to. I bought a bank-approved short-sale (meaning they approved the sale price...and I actually got it for $10k less PLUS got $8k deposited in my account after my tax return, for the FTHBTC). It took less than a month from my initial offer to keys in hand.
I can't imagine there would be too much of a difference between buying in a recession or a healthy market, other than price-wise. Even though I didn't have much of a credit history (I was 25 with 1 credit card and never had any loans of any kind). But did have 20% down and a minimum 6 months reserve after paying closing costs, so I was approved for the loan without any problem.
I did understand that some short-sales that weren't approved by a bank could take up to 6 months to finalize, and only after the agreed price went up enough to satisfy the bank. I can tell you I wouldn't have been able to afford my house before the recession and I could barely afford it today if I were to buy it today.
Real Estate is very localized, down to street/block level. There has been a bounce back in my area (central FL), but nowhere near bubble status. They say a recession happens approx. every 10 years (though probably not as big as the last one). We haven't reached the 10 year mark yet, but eventually there will be another dip....the question is, will the dip be big enough (or the growth rate low enough until then), to still be cheaper than current values?
You're best bet is to continue to save and research/ follow listings religiously to get an idea of the market, and to search for deals at ground level. Timing the market in real estate rarely works since you can be waiting for a decade or longer for any decent market-wide dip, and as already mentioned, that dip may not out-discount today's prices or interest rates.
In my case I looked and looked until I found a house that fit my budget and criteria. That's really all you can do. For something like a personal residence which you've already determined is not meant to be an investment, getting the best deal shouldn't be more important than finding a deal you can live with.
