looking for the bottom

Today I met a couple from Connecticut who are planning to move to Tucson. Their plan is to rent for a year, get the lay of the land and be ready to pounce when the market hits bottom.
We talked about this and that, the east side vs the foothills, different homes for sale and how the market's doing here in the Foothills, and elsewhere in Tucson. This was just a friendly chat, they're not clients of mine and they're not going to be for various reasons.

They wanted to know how prices were holding up, what was selling and what did I think was going to happen over the next 12 months.
I told them that there's been a steady stream of price reductions on homes in the Tucson Foothills during the last 10 months, typically about 30 price reductions per week, with quite a few homes having multiple price reductions over time. And while these price reductions at first were often just token reductions, $1,000 here $2000 there, during the last three or four months sellers have gotten realistic, and have been loping off sizeable chunks from the list prices. And another sign that sellers have really gotten the message about the market, is that the new listings have generally been much more reasonably priced and more in sync with current market conditions right out of the box. 
I also mentioned that recently, on average, homes in the Tucson Foothills have been selling for about 95% of list price, and that's a good sign, and could be taken as a signal that the market may be stabilizing. -When I got home I looked up the stats on that, and in the last 30 days, homes in the Tucson Foothills have sold for 96% of list price, that is, average sold to average list price and median sold to median list price-. I went on to say that I felt that we were now at a place where buyers and sellers were very close to being in sync regarding their expectations on prices. But that nevertheless, there were other forces and influences that were still keeping some buyers on the sidelines. Like these people, many buyers are trying to time the bottom of the market, negative real estate news, whether it's applicable to this market or not, is causing fear of buying, tighter lending practices are probably taking some toll here in the Foothills,
and the constant drumbeat of JUST REDUCED, MOTIVATED SELLER, MAKE AN OFFER, etc etc, combined with the sheer number of homes for sale in Tucson, about 8,800 sfr's(even though there are only 471 for sale in the Foothills) has given buyers pause.      
This fella said that was all well and good, but he was going to wait for the market to hit bottom. I asked how he'd know when the market hit bottom. He told me that when the homes for sale stopped having price reductions, we'd be at bottom.
When price the reductions stop, the market will have turned around already, and regardless of whether or not prices start rising, the whole psychology of the market will be different.
Deals will be harder to come by as more buyers actually enter into contracts, and sellers become emboldened by this positive turn of events.
There's a lot of pent-up demand out there, much of it tied up with buyers who are thinking about timing the bottom of the market.
When they decide that we're at bottom -whatever formula they use-and they start to buy, we're going to come bouncing off that bottom very quickly.