Need to borrow someone else's brain to make a decision

mapleques, just curious why you went with a jumbo. You're $13k of extra down payment away from a conforming loan, and depending on the split between conforming and jumbo rates, that might be a worthy goal. If you can scrounge up that additional cash (without stretching), or think you can hold off and save, that might not be a bad option. Really tough for anyone to make much of a call here without a lot more detail of course.

I need to know -

1.) What's the time horizon.

2.) Exactly which new development you're talking about.

Are we so sure rates will be higher later?

But, definitely on bjw's point. Go conforming if you can. Hell, if you need to buy right now, ask for that reduction in price...

But, personally, I think for those who made it to this point without buying, the option to see where things land is a very valuable one right now. I don't think anyone is calling an increase in prices right now, so the option to see how low they might go is worth something.

what do you mean by the time horizon? I'm a little reluctant to mention the development since the brokers may be perusing the pages. It's not a development that I have ever seen mentioned on Streeteasy so its a small time development in a declining market. We actually have no idea of when they think they will be able to close. The closing date in the offering plan just passed so there is a window of time for us to back out if we don't want to give them more time. Otherwise we can sign on to give them another year to close.
The reason we haven't put more money down is because we really don't want to. We want to have money in our savings instead of putting it all into a condo that may depreciate for a while before it starts to appreciate. Don't get me wrong- we think we got a good deal- its just trying to figure out if we can get a better deal there or someone else if we just pump our breaks for a few months.

mapleques,

You could try this approach:
Ask you current landlord to lower the rent BIG TIME.. if he doesn't budge, move into the new unit else enjoy the monthly savings...

Sounds like you're already expecting the market to decline. It might be worth it to pull out now and save up the additional $13k to qualify for a conforming loan. There's a good chance that rates will go up, which would further push down prices.

Have you looked at comps to see what's been selling and the prices?

Thing is, if you've been looking for a while and feel as if you've really found your dream place, then that's something to consider.

"Otherwise we can sign on to give them another year to close."

mapleques, are you locked into a price that is significantly lower than what they are offering the units for right now? My guess is no. So I would walk, get my deposit back, and continue to save (get into the conforming range) and look for a place you want to buy. If you don't find anything, buy a unit in the new dev you are talking about 6mo to a year from now when they are closer to closing. My guess is there will still be units available, at potentially a better price, and if not, you have your money and you have the next 6mo - year to figure out what you want to do with it. There is little risk in this scenario.

I cannot come up with a single reason why it makes sense to have a developer of an unknown building in a declining area hold your money for the next X amount of months. Not one. Walk.

I agree with JuiceMan and most others on this. But you might want to state what neighborhood it's in, because people on this board will have varying opinions (and that's all they are, of course) about what which fall faster in a falling market (or have more room for appreciation in a rising market, I suppose).