Bah, buy near the ocean, buy in good markets, buy where inventory is limited, find good mortgage product, know your limits, have a strategy, have an emergency plan..
Buy or miss the window.
"Buy now or miss the window"
Do you really think house prices will continue to outstrip wages and rents? Some places will move to a permanently high plateau and become the new Malibus or...whatever the super-high rent places are in NYork. For most people living in regular neighborhoods prices will not keep rising at this rate.
When people look at house prices they tend to forget: insurance, interest, taxes, repairs and inflation. Only the last one hits rentors, and rents are not keeping up with prices.
Rent now and save for the coming bankruptcy sales. Lots of bargains will be had.
The only way i can afford a home in the Bay Area is to sign onto the absolute insanity of an interest only loan, because the prices are so high, I cannot afford or qualify for a traditional mortgage. I refuse to take the bet that rates will continue to rise like they have been, nor do I believe there's a "window" of opportunity, where myself and others in my income bracket will be forever locked out of buying a home. Those that say there will be nothing but increases are whistling past the graveyard of past downturns - one of which I lived through in Northern California in the 80's.
This is all being driven by a national fad, an obsession to own a home, just like the national obsession with IPOs and .com stocks in the 90's. That was driven by the same greed here, and that greed will destroy the Golden Goose, just like it did last time. The more I read up on it, the more stories I see of the insanity going on in real estate right now, the more I get deja vu for the 90's here in the Bay Area, where everyone was so sure the party would never end, we'd all retire at 40 with millions, anyone could invest 1000 and make millions, every kid graduating from college with a degree in web design would make $150,000 a year...and more and more the hair stands on the back of my neck, because it all sounds so familiar.
Me, I'm betting a 20% reduction in prices in two years. I refuse to buy into this market. Period. I'll keep my rental, where I'm paying less than 30% of my take home each month, sock away the rest, and buy your property in two years -at a cheaper price. That's the bet I'm taking, not yours of buying at the top of a market, at insane prices, under insane mortgage terms.
I hate to have that attitude, as I don't want to see our country suffer, but there's nothing supporting this house of cards but greed and shaky financing.
We'll see about "windows" in two years, shall we? I'm betting heavy into the Bubble scenario - and I'm set up financially to survive it, I rent, have no debt, and I have decent savings, with a solid plan to build that even bigger over the next few years.