YES it is the BEST time in our lives to buy a home. And YES you can buy MORE square footage for your dollar. And YES you should buy a home now if you can afford one.
But, DONT buy a foreclosure pre-owned house if you think it is like every other home on the market! A foreclosure has been lived in and in most cases, not maintained. Home maintenance is always an issue in the final few months of the foreclosure process. Which means that YOU will have to start everything up again. Plumbing (water heater & lines), electric, gas, HVAC (heating and air conditioning), roof etc. When you are buying a foreclosed / pre-owned house, most of the parties involved will NOT prepare you for the expenses that will hit you. Will they tell you about the mortgage? Yes. Will you be told about the insurance? Yes. What about the association fees? Yes, probably. Property taxes? Of course. But what about the $700 for a new water heater 8-months after you buy the home? Are you ready? Or how about the termite letter/bond that is due 1 year after you move in? Will you remember? Do you have the cash to replace $5000 furnace AND put gas in the car?
My best advice is to buy NOW but plan for those unforeseen expenses. Everything is expensive when you buy a home; most expenses around the home are $500 or more. Plan for the inevitable folks.