I think Hyperborea hit the nail on the head. The median income will always seem low when compared to the median house prices. When compared to the median household income it doesn't look so bad. Attempting to predict the housing market is a loosing propasition. Not long ago the housing gurus predicted a housing crash nation wide. Obviously it didn't happen. I think that if conditions remain the same you might see a slight drop in housing costs or a slowing of apprieciation, but I doubt it. I don't foresee a sharp decline everyone is screaming about. Interest rates go up, but only to the point where banks start losing money, then they will lower them again. It has happened in the last couple of years. The mortgage rates started going up, the real estate market started to cool, then the banks started lowering them again, and the values started rising again.
As far as buying goes I have been fortunate I've owned four houses and have made a profit on three (I still live in one). I owned the houses for 4, 3, and 1 year, I lived in all of them and normally made over 15,000 per house when I sold it. If your motivated, then owning them short term can produce profits. However they need to be in poor condition and you need to be able to do all of the work.
If you are unsure whether you should buy or rent, then you should rent. If there is a quetion in your mind then you probably aren't ready for the long term commitment of dealing with owning house. Also if you are unsure if you are going to stay in your current area then I would definately say rent until you find an area you are willing to live for at least 5-6 years.
Of course al of this is looking through the rose colored glasses of a place where retirees love to live so until the baby-boomers quit retiring the property values around here will most likely go up.