Yes, no doubt it is best to buy at the bottom of the market, but there is often no way of telling when that is. I also think that sometimes it is cheaper to buy than to rent, depending on your market, and if you can look at more distressed properties.
Zoe, I found this interesting article on buying a HUD house after a bankruptcy:
I have only bought one HUD house, and it was an investment, and I don't qualify for the good neighbor program, but you probably do. I found buying through HUD a little rigorous, but pretty straightforward and fun. I know they work with people who have had bankruptcies-- here is an article from FHA about that process: