We are currently in a “buyer’s market” since prices have fallen substantially nationwide and owners are willing to make further reductions and negotiate transaction expenses, like paying for closing costs, in order to seal the deal. Prices of homes tend to fall in the winter when fewer people are able or willing to move.  The high season for home purchases is during the spring and early summer, when families plan their move before the school year begins. 
Watch out for the following when considering a foreclosure or short sale:

-    Research the history of the property through public records.
-    Investigate with a title company to verify there are no pending claims on the property.
-    Hire a home inspector to look over the property for damage.
-    Make sure you have sufficient funds to cover the costs of purchasing the property in addition to the necessary repairs.  
-    Get a licensed realtor to help you with the transaction and verify the realtor’s credentials with professional boards in your state.

If you do your research well then a foreclosure/short sale can be a viable option for getting a house at below-market prices.