Though prices are high, I wouldn't suggest waiting to see if prices drop, which essentially is just a big gamble. Aside from what happens to market prices, consider if you purchase today, the literally thousands of dollars you will save from rent, and from the considerable tax advantages. Not to mention the likely increase in home values. As of today, there are 7300 houses, townhouses and condos on the market. 4092 have been on the market for over a month.
Prices still seem to be rising.
All things considered, that's not a bad investment. I think next year at this time, you will wish you did. Though nationally loan delinquencies have risen lately, the most recent news I've read has indicated a decrease in delinquencies. I don't know the precise figures for San Diego, but we are not going to see many foreclosures any time soon. If you're waiting for that kind of deal, you're going to continue waiting, while the prices increase substantially and steadily.