There's no question that fine wine prices have been negatively impacted by the current economy with higher end wines more severely impacted than others. Some people will be forced to sell wine they would rather not to raise cash (which we've seen frequently with private collectors selling through Vinfolio in recent months) or do so for a variety of other reasons (see
Common reasons to sell wine). Some potential buyers believe prices have further to fall and are deferring purchases which, in turn, contributes to further price declines (the deflationary spiral at work).
When to buy
If you're a wine collector trying to decide when prices are at the right level to resume buying actively, I would make an analogy to stock investing. Some investors will look at the Dow Jones Average today and fear it is going down another 50% from yesterday's weak close below 8000; others will view the market as oversold and shift cash back into the market. Where you place yourself on this continuum is a decision only you can make (is the wine glass half empty or half full?).
As most professional stock investors will tell you, calling the bottom is near impossible and is often not clear until months after it's happened. The long term outlook for fine wine, however, remains positive. The global demand for fine wine is only going to grow with the global economy. In particular, as emerging economies (mostly in Asia) recover, they will drive fine wine demand and higher global prices sooner than the average stock price recovers.
Bottom line: As with stock buy/sell decisions, it's your money so make your own decision after evaluating multiple opinions and considering the facts.
